Single mothers are struggling with a difficult balancing act: Since they have to take care of a child on their own, there is a high financial need. However, the time window is limited due to the educational obligations. Single parents at best have a part-time job. The income is often insufficient. Moreover, the low income makes it difficult to obtain a loan. We’ll tell you how your chances are best.
“Do you get a loan as a single mother?”
In fact, if you are a single parent, the biggest opportunities are for a home-based loan on the internet (we will discuss that later in the article). In the branch or direct bank of your trust, on the other hand, you will have great difficulty getting a loan. What can be the decisive reasons, we would like to present you.
Reasons why single parents from HB Bank get a hard loan
Branch banks usually do not lend to single parents due to credit problems . The credit repayment ability is not sufficient in their eyes.
Most banks calculate those according to the following formula:
- Of the monthly income, all kinds of expenses (food, rent, electricity, savings reserves, etc.) are deducted.
- In addition, the potential credit rate is subtracted.
- Now a surplus of on the average 150 euro (value of most savings banks), at least however 100 euro remains.
Income of single mothers leads to problems in the credit calculation
For single parents the additional expenses for the child are deducted .
This causes the following issues that you should know about:
- The child allowance must not be recorded as income
- Maintenance for the child must also not be recorded as income. Some banks, however, offset this with the expenses for the child
- Unemployment benefits I and II are also not recorded as income, the same applies to social assistance for the child
- Banks also plan an additional risk factor for part-time work because there is a risk that the childcare job may have to be abandoned
If you are a single parent, your child will dramatically weaken your credit rating. The additional funds that could compensate for this actually do not help you, because they are not recorded as regular income.
Online or bank branch? How do I get a loan as a single person?
Banks: guarantors and collateral as a condition when single parents apply for loans
As a single parent you get a loan from a bank virtually just with guarantors. It is also often required to be a full guarantee: the guarantor must agree accordingly to pay back the entire loan if necessary.
Theoretically, there is also a chance that you will get the loan through collateral. You can, for example, mortgage real estate property . Practically, however, it has been shown that most single parents do not have the necessary collateral.
Even if this is the case, a guarantee is more advisable: in the event of a failed repayment, you will not immediately lose your home. The use of home ownership should therefore only be the last resort.
Interest rates are usually set slightly higher for single parents The interest on a loan given to single parents is usually slightly higher without guarantors. This finding is generally valid. Each lender is aware of the increased risk associated with a loan and secures this by higher interest rates.
Individual credit check on online loan allows single parent better credit opportunities
If you need an online single parent loan , it is advisable that you research other credit requirements. Make sure that money that you receive as financial support (eg child allowance, child support and state payments such as living and parental allowance) is considered as a fixed monthly income, as is the case with HT’s online loan.
Especially if your financial needs are comparably low and you want to lend only a small amount of money, you can check without obligation your credit opportunities with us, without affecting your Schufa score.