Single parents men and women are often faced with special financial requirements in their everyday lives. Often the occupation of a single parent is considerably limited or not possible at all due to the care of the children. Accordingly, single parents are often confronted with the difficulty of earning a living on a single income or even on unemployment benefit II.
Start request for single parents:
Special burdens then often lead to the need to take out a loan. However, this is subject to special conditions for single parents and is only possible by meeting specific requirements. Below, we explain in more detail the conditions, opportunities and restrictions for single parents, as well as current developments.
First of all, the granting of credit is always at the discretion of the respective banking institution. In this context, basic conditions are checked first, such as the age of the applicant, income and financial security. The main purpose is to ensure that a possible loan can be easily paid off with the income at hand.
If the applicant does not have any collateral, additional possibilities, such as a guarantee from a third party, are considered. This is an outside person who assumes payment obligations in the event of the borrower's insolvency.
In addition, the creditworthiness is also checked. Here the credit institute gets an overview at the Schufa, how reliably the applicant settles his current credits and whether already unpaid debts are present.
Schufa is the so-called "Schutzgemeinschaft fur allgemeine Kreditsicherung", which is a database that collects information on all consumers. In the event of non-fulfillment of contractual obligations, corresponding data from contractual partners about the customer is forwarded to Schufa. Schufa does not collect any data on its own. Schufa's partners include a wide variety of institutions, such as banks, insurance companies and companies in the mail order business. An entry in the register can be initiated by the contracting party only if also the judicial reminder procedure has been initiated.
In addition, the Schufa also serves to check creditworthiness if the customer has no debts at all. In this case, the protective association checks the probability of a payment default occurring. The ability to pay is checked in comparison to other borrowers with approximately the same income and assets.
What to do in case of negative Schufa
If a potential borrower has a negative entry at Schufa, there are various ways to counteract it.
First of all, the customer has the option of having his Schufa entry deleted. Here, however, special periods are to be considered. Guarantees, for example, can only be deleted if the loan has been settled in full. Loans in total, on the other hand, remain stored for three years once the loan is paid off. Even debts in the mail order business remain listed in the directory for three years.
Basically, every customer has the right to request his data from Schufa and to have it corrected in the event of an incorrect entry. A subsequent debt settlement is possible, but useless for the customer, since the data is nevertheless recorded over a three-year period.
If there is no financial collateral and the possibility of a guarantee or a negative information from the Schufa, the granting of a loan for single parents is usually denied.
Alternatives for single parents
But even in such cases, there are several alternatives for single parents.
Today, for example, it is possible to find private lenders through various online platforms. However, the disadvantage here is that the interest rate for personal loans can be designed almost freely and there is no limit by maximum rates. In addition, the granting of private loans is often subject to special conditions. Thus, the lenders regularly require that the applicant can convincingly present his request. Likewise, it is also in the context of private loans often common to check the creditworthiness of the borrower. Nevertheless, there are currently a large number of providers on the Internet that enable single parents to take out a loan in the desired amount and also pay it off over a variable period of time.
Another option for single parents are so-called small loans. These are granted in exceptional cases for certain groups of people, regardless of financial collateral or possible guarantees. However, such loans are limited to a maximum of five thousand euros, but are often associated with very low interest rates.
- Credit together with another person
Higher credit amounts can also be granted if another person can be found to take out the credit in addition to the single parent. Appropriate credits are granted on the part of different banking institutions, since the risk of an insolvency by two persons is clearly minimized.
However, caution should be exercised when using forms of credit outside of regular lending institutions.
What to watch out for?
The Internet offers a variety of providers for loans, which often advertise by special conditions and low conditions, but also holds high risks ready. Often, credit installments agreed online are no longer affordable for single parents after a short time, so that spirals of debt become an unpleasant consequence. Likewise the borrowers are often occupied with overpriced interest rates and pay back so an immense sum, without having used the money at all.
Accordingly, it is of great importance in the run-up to a loan to check the loan agreement extensively and to deal with the unpleasant fine print.
Certainly, however, the interest rate is initially decisive for taking out a loan. It is especially important when it comes to the settlement period and thus the installments of a loan. With loans the mortgage interest should be as small as possible.
Loan interest is a fixed percentage value that is added to the loan and must be paid by borrowers over the settlement period additionally. The interest imposed on a loan can be considered as remuneration of the bank that issues the loan. Banks collect this amount in addition, because they want to be insured for the risk of non-payment.
However, different forms of interest are taken into account when granting loans. These include, for example, creditworthiness-related interest rates, which have no fixed value as they are calculated on a customer-dependent basis.
Likewise, the so-called nominal interest rate and the effective interest rate are calculated for a loan. The nominal interest rate describes the amount that the borrower pays to the institution for the loan itself. This is always aligned with current developments in the market economy and corresponding supply and demand.
The effective interest rate, on the other hand, often described as APR, describes the cost of loans. It is calculated by various factors, such as the nominal interest rate and the repayment of the loan.
Loans for single parents interesting thanks to low interest rates
Compared to the past years a Dahrlensaufnahme seems to be particularly interesting at present, since the German financial market is up-to-date in a so-called low-interest phase. Rarely before could borrowers enjoy such low Dahrlehenszinsen.
In addition, forecasts indicate that there will continue to be a downturn in lending rates.
When taking out a loan, it is also important to bear in mind that not all loans bear interest at the same rate. For example, loans in the area of construction or real estate financing are more favorable than other loans. The basic reason for this is the fact that a large number of customers who want to take out construction or home loans already bring their own capital with them and thus co-finance a share of the loan from the very beginning.
Likewise, such loans result in additional security for the banks, as the real estate object serves as additional collateral.
No matter what form of loan a customer wants to use, it is necessary in advance, of course, to conduct a detailed examination of possible interest rates. Although the interest rates for loans are currently at a record low, should still not be blindly taken a single credit institution in use.
In order to take advantage of a suitable offer should therefore be a loan interest rate comparison. Often such a comparison is possible online. In addition, important conditions should be clarified at an early stage. This includes, for example, the possibility of unscheduled repayment and accordingly the adjustment of the repayment rate.
Not every institution provides this option for its customers. And customer service should also be written large in this context. For borrowers it is enormously important to have a contact person on the spot who is available at any time for the needs of his customer.