In Germany all families with three or more children are considered to be rich in children. Almost all of them are characterized by the fact that on the one hand they have very high living costs and on the other hand they have very high financing requirements.
The latter is primarily due to the fact that adolescents and adolescents are constantly incurring new and often unforeseen expenses, which as a rule do not tolerate deferral. The savings are not always so high that these additional costs could be covered. For this reason, it will often be necessary to apply for a loan for large families from a bank or savings bank.
Requirement for a loan for large families
The basic requirement for a loan for large families is that at least one of the two parents must have a regular income as an employee. This income must also be high enough that the bank can use it as collateral, which in the specific case means that it must also be attachable. Before the bank approves a loan for large families, it will calculate exactly whether the family in question will also be able to provide regular monthly loan installments to repay the loan. For this purpose, the income is compared with the expenditure. For families with many children, it is generally advisable to prefer longer terms for a loan, since the monthly loan rates are lower than for shorter terms.
Especially if there is only one main earner, the loan for large families should always be covered by residual credit insurance against the risks of inability to work, unemployment and death. If one of the first two cases occurs, the residual credit insurance will continue to pay the monthly credit installments instead of the customer. In the event of death, the outstanding loan amount at that time is settled so that the family does not have to be burdened with it.
Additional collateral is often required for a loan for large families. For example, the assignment of a building society savings contract or a savings book could be considered.
Home finance and housing subsidies
Families with large children, in particular, are to be able to purchase residential property through certain financing programs and housing subsidies from the federal states.
Depending on the federal state, the conditions for these special loans for large families can differ considerably. Often this is also a family mortgage, where a small interest discount is granted on the loan for every child under the age of 18 for whom child benefit is drawn.