A long-awaited wish has been fulfilled, a child is on the way. Maternity protection is granted to the expectant mother so that the expectant mother can prepare fully for the birth and afterwards. It begins six weeks before the birth date and ends eight weeks after the birth. As beautiful as this time is seen by most expectant mothers, the joy of the new earthly citizen can still be considerably dampened by financial worries.
Purchases such as a stroller, reimbursement of babies, the furnishing of the children’s room or a new family car are necessary. This quickly brings together a few thousand USD, which can either be financed from the savings stocking or only with a loan despite maternity protection.
The expectant mother receives her full salary during maternity leave. Parental allowance is paid if maternity protection ends. The amount is 67% of the previous net income, the maximum amount is 1,800 USD. It plays an important role whether the young mother is a single parent, has a partner and is married. If the expectant mother is a single parent, a loan may cause some difficulties despite maternity protection. The loan may then have to be secured with collateral.
The situation is different for a couple. If both want to take out the loan despite maternity leave, at least one partner should have a full-time job. The income should be sufficiently high and should be received regularly. If the young couple can then meet the bank’s requirements, the loan will also be approved.
The parental allowance, which is paid for 14 months, is not counted as income by the banks. The reason is that it is a government benefit and cannot be seized. But if the partner’s income is high enough, the parental allowance does not have to weigh us down. However, one of the conditions is that the partner’s Credit Bureau is impeccable, it must not contain any negative entries.
Banks always check income and Credit Bureau before lending, and a permanent position is also checked. The employment contract may not be limited and may not include a trial period.
However, there will be a financial gap in the income of young parents. If the mother stays at home after parental leave and stops working, there is no salary. Parental allowance will not fill this gap, especially since it is also limited in time. The mother’s job must be kept free, but many mothers choose not to do the job once the child is there.
If a loan was taken out in spite of maternity protection during maternity leave or during pregnancy, the loan that was taken out at that time can often no longer be paid. Banks also know this and therefore often only give a loan that is paid off during parental leave. During this situation, not all of the previous net income is available, but at least an acceptable part of it. Installment payments would then still be payable.
Often, however, a smaller loan amount is not enough if, for example, a new family car has to be purchased. Here it is possible to take out this loan as a car loan and to deposit the vehicle letter as security with the bank. But often other things have to be bought from the loan so that it cannot be assigned to a specific purpose. Then you could have a chance of a loan despite maternity protection if the partner who is working full-time takes out the loan in his name.
The other version, as previously mentioned, would be to take out a small loan and pay it during parental leave. Nevertheless, monthly installments have to be paid. This may still be possible during parental leave, but it often runs out afterwards. Will the young mother return to work after parental leave or will she stay with her child at home? These are questions that banks can of course not prove and that is why they are very reluctant to take a loan despite maternity protection.
If the situation is such that the young mother has no partner and is a single parent, she will also receive her parental allowance. But banks don’t count this money as income. So there is no security for the loan. The solution here would also be to take out a small loan and pay it during parental leave.
However, higher rates come with a short loan term. Whether they can be paid would have to be checked. A household bill with all income and expenses is also recommended here. If the calculation shows that the installment can be paid, the loan could be secured with a guarantor. Think of the parents or siblings here. But these have to be solvent and have their own income.
In general, a loan can be approved despite maternity leave if a partner has sufficient income and works full-time. Then both partners have to sign the loan agreement. Parental allowance does not count as income, but is available for 14 months.
If the couple would like to take out a larger loan and there is an exceptionally good income, which is far above the attachment limit. Then it is possible to take out the loan at a high rate and pay it for 14 months. If the parental allowance is no longer paid, a low installment could then be paid. However, this is only compatible with a conversation with the bank.
The extent to which she responds will be her decision. The couple should always check whether an installment and how much are paid before each borrowing. In addition, it has to be considered that the family has grown and causes considerable costs.
If the budget review gave the green light, a credit comparison should be carried out. A cheap provider can be found if the couple does not choose the house bank. After entering the loan amount, the term and the desired rate, the borrowers receive all providers with one click.
Not only is the interest rate visible, but also all terms and conditions that must be met. In principle, the creditworthiness of a loan has to be right, how the repayment looks like can vary greatly from provider to provider.