Single parents often face special burdens: they are responsible for the child or children alone and often can not work at all or only work part-time.
Even with a full-time job, the single parent is missing the second income of a partner. Nevertheless, unforeseen expenses are always incurred, for example for a car repair, a new washing machine or a school trip for the child. A loan can bridge financial bottlenecks – but is it also approved?
Single parents: income is often insufficient
The question of whether a loan is granted depends above all on the financial situation of the applicant. Single parents with low incomes therefore often struggle to obtain the commitment of a bank. If the salary plus child support and possible maintenance payments are insufficient to cover the cost of living and regularly repay the desired rate, the loan is unlikely to be granted.
However, adjustments can still be made to receive a loan anyway: Under certain circumstances, single parents may reduce the loan amount or choose a longer term to reduce the monthly repayment burden. In addition to the financial situation, the bank also checks the creditworthiness by a credit check. Who has a good value here, increases his chances of getting a loan.
Easier to loan with guarantor or second borrower
Single parents with a high income usually do not have problems with lending, even if they live without a partner and therefore no second salary is available.
But even if the creditworthiness leaves much to be desired and the income is insufficient, single parents can get a loan: By a guarantor, for example, the own father or the mother, the bank is often convincing. A second borrower with a better credit rating, who takes over the obligations, can also ensure that the loan is approved.
And if single parents own their own property, this represents a security that also has a positive effect on the bank’s decision.