A loan during parental leave is possible in principle. However, certain conditions must be met for this. Even if the parental allowance is paid on a regular basis and on a monthly basis, German banks and savings banks do not consider it to be income in the sense that it can serve as credit security for the loan during parental leave.
For this reason, it is usually necessary to provide further collateral. So it stands to reason that the earning spouse or life partner signed the loan agreement and acts as a second applicant or at least as a guarantor.
A fixed income is one of the most important credit requirements at all. Not only does it have to be paid on a monthly basis, but it must be high enough to allow one to earn a living and, on the other hand, to pay the loan installments. This can certainly be the case with the parental allowance. However, it has been observed over and over again that people who apply for credit during this time have difficulties. Often, the loan application is only granted with additional collateral or even refused.
As a rule, banks can always make an important exception if the person who is on parental leave can provide evidence that they will be taken back by their old employer after the end of parental leave. It also makes a big difference whether you only need a small loan or a larger loan amount during parental leave. Small loans are much easier to obtain than loans with loan amounts in the five- or even six-digit euro range.
In addition to income, credit bureau also plays a role. This applies to both persons on parental leave and for all other persons. However, there is an exception if you borrow the loan during parental leave from a private lender or from a foreign lender. Foreign lenders, however, only grant loans to people who are in permanent employment and can therefore prove that they have a fixed income.
In principle, the credit chances can be substantially increased if the spouse acts as a co-applicant. This approach is also obvious, as many purchases that are made during parental leave affect not only the child, but also both parents together. This applies regardless of whether a new car is needed or whether a home furnishings should be financed. Often there is also a move to a new apartment or a house. Here, it is all the more important not to leave financial planning to chance and to make all important decisions as far as possible together.
A credit comparison is very important when it comes to finding a loan during parental leave. You should focus not only on the offers of your house bank and various surrounding branch banks, but draw further offers in the short list. Often direct banks in particular offer very good conditions for lending. They do without a branch network and can pass on the resulting cost savings to their customers in the form of low interest rates and favorable credit terms during parental leave.
Interest rates play an important role in every loan. Basically, they are subject to more or less significant fluctuations. Among other things, they depend on the market interest rates and the conditions of the respective banks. If the general market interest rate is low, you can generally get a low-interest loan, which should be much more difficult at other times. In addition, interest may in some cases depend on the creditworthiness of the client. The better the credit rating, the lower the interest rates in these cases. Loans where this is the case are also called credit-based loans.
An important facilitation in a credit comparison is a loan calculator that can be found on almost every credit comparison portal. Here you can enter various criteria, specifying as much as possible the search for a loan during parental leave. This has the advantage that you will only receive credit offers from the loan calculator that exactly match your search criteria.
Application, authorization and payment
The application for a loan during parental leave can be made either at a bank branch or online. Some banks offer both online application and application in the store. An application in the branch office has the advantage that you immediately eliminate possible ambiguity and have open questions clarified directly. Even with an online application, it would be an advantage if you leave your most important contact details to the future lender. So the lender can contact you at any time, if documents need to be filed later or if important questions about the loan application have to be clarified.
When applying for a loan during parental leave, you must provide your income truthfully. In addition, you must enter all information relating to your person and your financial situation in the appropriate place in the loan application. Afterwards you can send the loan application or hand in personally. Now the loan application will be decided. For a German bank or savings bank loan this also includes a credit bureau information. Everything should be alright there. Negative credit bureau entries significantly reduce your chances of getting a loan during parental leave. If you have the opportunity, you should eliminate the reasons that led to one or more negative credit bureau entries before applying for a loan. If this is not possible, you can talk to the bank and explain your situation in detail. If there is enough other collateral and if the income is correct, there is often nothing against borrowing. Whether this also applies to a loan during parental leave is an open question. Here it is absolutely necessary that further securities exist.
If, after careful consideration, the bank concludes that the application for a loan can be granted during parental leave, you will receive a prompt message about the decision. Now the money can be transferred to your checking account. This can be your checking account at the house bank. However, this is not a must. If you wish, the money can be transferred to another account of your choice and will be fully available to you. If you have requested a installment loan, you can use the money freely. The situation is different with a car, real estate, construction or modernization loan. Here a purpose-unfamiliar use of the credit is excluded.