Child benefit is a basic provision for all children who live in Germany. It is paid from the month of birth. Since the last child benefit increase in 2010
- 184 USD for the first and second child
- 190 USD for the third child
- And paid 215 USD from the 4th child.
A child benefit increase is not in sight until 2016 at the earliest. Child benefit plays an important role in borrowing because it increases the chances of success with a child benefit loan.
Child benefit is paid regardless of income
Income plays no role in the amount of child benefit. Many parents continue to work after birth, so child benefit means an increase in income. This also has an impact on the financial transactions, because a loan with child benefit also has a chance of success. It becomes more difficult if the parent or one of the parents does not go to work and the spouse’s income is not high enough. Child benefit can lead to the fact that, in case of doubt, a loan is approved if the decision was previously shaky.
A loan is dependent on income
In the credit decision, the income is very important. It must at least exceed the garnishment exemption limit, which is around 1020 USD. The further over the income, the more likely a loan approval will be. The child benefit increases the monthly income significantly. As a result, a loan decision is made in favor of the couple and a loan with child benefit is approved. The only requirement is still the Credit Bureau: If there are no negative characteristics, nothing should stand in the way of a positive credit decision.
Child benefit and unemployment
Those who receive ALG I and Hartz IV cannot hope for a loan approval. Neither a bank in Germany, nor a financial institution in Switzerland or Liechtenstein give a loan to the unemployed. The economic situation is too uncertain. Child benefit doesn’t make sense either, because a child benefit loan is not an option for unemployed people.
Child benefit loan for self-employed and freelancers
Self-employed people and freelancers find it difficult to get a loan anyway. Due to their uncertain financial situation, many banks cancel in advance. But child benefit can also increase the chances here, because it is added to the income. In this case it is more likely to find a bank that is willing to help financially. Private money markets are another option. Here private individuals also lend their money to self-employed and freelancers with child benefit.