Credit with Social Welfare.

Since the introduction of unemployment benefit 2, i.e. Social Welfare, it has been almost hopeless for unemployed people to get a loan with Social Welfare. This can be explained by the fact that the benefits from Social Welfare are so scarce that they are more than bad enough to make a living. As a result, the house banks do not grant an installment loan or an overdraft facility because the risk that the payment obligations that a Social Welfare loan entails cannot be met.

Swiss credit

Swiss credit

An unemployed person may receive a Social Welfare loan through an online credit intermediary abroad. This is popularly referred to as “Swiss credit”. A good starting point is my-kredit, for example. Here the unemployed can start a free credit inquiry via the Internet. Here, the interest rates for the entire term of the loan vary between 4.9% and 7.5% depending on the amount of the loan and the length of the term. The borrower receives a loan offer for his loan with Social Welfare within two working days. What is interesting about the offer from my-kredit is that my-kredit does not query Credit Bureau for a loan amount of up to USD 3,000.

This can be very useful under certain circumstances, because due to the poor economic situation in Germany combined with the high unemployment figures and the low wages and salaries, the liabilities of the consumers increase significantly and also the negative Credit Bureau characteristics are increasing. What is particularly interesting about this loan with Social Welfare is that the loan amount can be paid out in post. This means that the Social Welfare loan is brought by the postman or can be picked up at a post station. For Social Welfare recipients, this has the advantage that no incoming payments are posted to his checking account, which would ultimately lead to a reduction in his social benefits.

Surety bond

Surety bond

Another option for improving the small budget can be a surety bond. This means that the borrower bears a surety on the deposit for his apartment. Here is a good contact address free of deposits with an interest expense of 5.25% per insurance sum and year.

Across Lender and Spin Lender

Auxmoney and Smava (Link: www.smava.de)

The online loan portals Across Lender and Spin Lender, which broker private loans, may also grant a Social Welfare loan, as investors’ decisions are made not only for economic but also for social reasons. Loans with an effective annual interest rate of 4.79% or 4.85% are offered here.

Nevertheless, every Social Welfare beneficiary should carefully consider the decision to take out a loan, in whatever form, because ultimately the Social Welfare benefit is an absolute minimum. And then the question arises how the rate for a loan can and should be added to the existing fixed costs. In addition, every Social Welfare recipient is obliged to report any income to the job center, which in turn reduces their benefits accordingly and ultimately means that they have gained nothing.