Do you need a loan? With 3 children or more, finding a loan can be difficult. But giving up does not apply when there is an urgent need for credit, solutions are almost always found.
We do not want your children to lead to the credit crunch. In summary, you will find all the necessary information on how the bank assesses your loan request. In addition, we give you solution options on how to get credit requests despite having children.
Credit with 3 children – why is credit a problem?
Statistics answer the question of why a loan with 3 children is problematic. Even for “intact” families, the risk of poverty for families with 3 middle-income children (2011 West) is 24.5 percent. In the east, the number is as high as 31.4 percent. Around one in four families with three or more children is either poor or acutely at risk of poverty, despite having a good income.
Those who are poor have no money to be able to pay installments safely. Credit security, on the other hand, has almost become a trademark of the changed framework conditions since the beginning of the USD crisis. Regular loans are cheap, it is undeniable, only more and more people are blocked from accessing regular loans.
The state previously provided support for the 3 child loan. For example, the homeowner allowance, which was abolished in 2005, helped families to afford their own homes. Child-raising allowance for everyone and for a full three years has been transformed into parental allowance. It only helps elites to live a good childhood without a large loss of income.
Proof of creditworthiness – difficult when it cannot be attached
A regular credit check basically consists of two parts. The Credit bureau must not have negative entries, but shows a proper payment history. The creditworthiness data of Credit bureau are included in the score. The score is reduced by the influence of the comparison groups. Households with three children are more likely to experience payment difficulties than households with childless couples.
Due to the influence of the comparison group, even very well-earning parents must not have the best credit rating for lending. The second component of the credit check deals with the question of payment security. On the one hand, an attachable portion of income must be demonstrable. Up to an income of 2,159.99 net, family income is non-attachable.
Parental allowance and child benefit are not included in the credit-relevant income. In the case of a household with five people and small children, it cannot be assumed that both parents are fully employed. In Germany, the average earner has less than 2,000 USD in net income. The garnishment limit thus becomes the first major hurdle for regular lending.
Can pay credit – household bill
Not every bank insists on attachable income for a loan with 3 children. But what every lender attaches importance to is to get his money on time. Whether the payment in installments is portable can be determined from the household bill. It consists of individual costs, such as rental costs and flat rates. The software calculates a flat rate for how much money is required for food, clothing, etc.
The bottom line is that there must be a sufficient surplus of income so that the installment can be paid on time. A numerical example for illustration. As a basic amount for single households, credit institutions assume around 800 USD in living costs. For every additional person about 200 USD must be spent.
For the loan with 3 children, this results in a flat-rate living cost of around 1,600 USD. Local higher prices, for example in the metropolitan areas, can drive the flat rate even higher. Loan officers usually have no manual influence on the amount of the lump sum. If 2,000 USD were earned net in the numerical example, a maximum of 400 USD would be left monthly in installments.
Existing debts, cell phone contracts as well as savings contracts (private old-age provision) would also have to be paid from these 400 USD.
Problem solving – loan with and without guarantor
Low interest rates, quick and easy credit decisions can promise solvent borrowers. Good personal creditworthiness is largely transferable as a guarantor through the assumption of liability. Asking your own parents or siblings for help may not be pleasant. But it is the easiest way to secure a regular loan with low interest rates.
Another alternative, sometimes even without interest, is the installment loan for purchasing from a particular provider. Sales loans are often granted under very low conditions. A loan with 3 children – order today and pay the first installment in three months – is not uncommon. It would be comparatively easy to apply for a micro loan with a short term.
If the overdraft facility is not enough to cope with a larger bill, microcredit is the quick alternative. Between 100 USD and 1,000 USD would be easy to finance. However, the short runtime is a disadvantage. The offers range from 30 days to a maximum of 90 days.
Loan brokerage offers fair opportunities for long-term installment loans with poor credit ratings. Best Lender and Auxmoney, for example, provide long-term and at the same time serious credit. We recommend applying for a loan through Best Lender for a loan with 3 children. With an application, banks and private donors could be addressed at the same time.