Most people dream of starting their own family and having children. But of course weddings, houses and children cost a lot of money. It is therefore almost impossible to pay all costs out of your own pocket. Apart from that, one parent stays at home during parental leave to take care of the child and the household.
In the first year, parents receive the so-called parental allowance, which is about 67 percent of their last income. Despite this small injection of money, financial difficulties during parental leave are inevitable. Most parents have to do without major purchases and repairs – unless they take out a loan during parental leave.
Parental leave – what are the chances?
In the first year of parental leave, you receive parental allowance for financial support. Although you perceive this money as income, banks do not consider it as such. The reasons for this are diverse. The parental allowance is only a fraction of the previous income and is only granted for a period of 12 months. Of course, the banks cannot be sure that you will return to your old job after a year.
If you continue to stay at home and the parental allowance suddenly ceases, you may have problems with loan repayment. If parental allowance is your only security, you won’t have a good chance of getting a loan. The situation is different if your partner earns enough, you appoint a guarantor or have valuables. In this case, the bank can hedge the loan repayment otherwise and is more willing to grant you a loan.
Parental leave – consider your financial limits
As parents, you have a lot of responsibility for your children and their future. For this reason, it is important not to endanger yourself unnecessarily by borrowing and not to incur debt. Choose a loan amount that you feel comfortable with and that you can easily repay. This reduces the risk of over-indebtedness and ensures that your family is financially well off. On the Internet you will find many online banks that offer loans on favorable terms. Low interest rates, long terms and small monthly installments – that’s the secret to successful borrowing.