Children are more likely to need more credit. So what would be more obvious than repaying the loan with child benefit? With 368 USD child benefit, for the two offspring, an impressive loan amount could already be repaid. Unfortunately, it’s not quite that simple.
Child benefit credit – Social benefits are taboo
The hope that you can only apply for a loan with child benefit is unfortunately deceptive. The child benefit paid in Germany is impressive. At least 368 USD are paid for two children. Unfortunately, child benefit is a social benefit from the state. Similar to the child-raising allowance or Social Welfare, it is attachable. Since the social benefits of the state cannot be pledged, income is not counted among the eligible types of income.
Only the income from dependent employment is eligible for lending. Income from investment income, renting, leasing and self-employment also count towards eligible income. But very few who think about building a loan on child benefit have this income situation.
What are the credit requirements?
A loan with child benefit is only possible indirectly. The labor income must be above the garnishment exemption limit. For a household with four people, the net income must be at least 1870 USD. A credit opportunity can only be reckoned with beyond the attachability.
Anyone who barely jumps over this hurdle is by no means out of the ordinary. Existing payment by installments and long-term contracts must be added to the total. Typical pitfalls can arise from mobile phone contracts, but also membership, for example in the fitness club. The budget bill can also become a pitfall. The comparison of income and expenditure must always prove an income surplus.
If all of these conditions are met, the employment contract is unlimited and not terminated, then there are credit opportunities with all credit institutions. Nevertheless, even under these conditions, the family fund is of course not filled to the brim. The affiliated loan comparison offers savings opportunities. Low interest rates relieve the household budget. It is up to everyone to decide whether the loan is actually paid through the income from work or whether the child benefit is transferred.
Way out of the credit crunch
Unfortunately, around 20 percent of all households with children do not have an income above the attachment limit. The reason for this may be the difficult compatibility of family and work or simply the individual life model. Political guidelines often tie hands to commercial lenders. With all understanding, you cannot grant a loan. A way out of the credit crunch would be possible through the loan guarantee of a solvent guarantor. Another alternative is private credit.
Loans from private donors are not subject to a complex set of rules. It is up to him whether a private investor accepts child benefit as income. You can easily contact private investors via one of the portals for private lending.
For a private loan approval, a clear explanation of how the money can be repaid counts. If, for example, child benefit is to be used for this purpose, the loan can be approved with private child benefit.