In the case of an installment loan, the borrower agrees regular monthly installments with the same amount, only the first or last installment deviates slightly due to the desired rounding to smooth amounts. Hartz 4 receive unemployed and possible other members of their needs community after the unemployment benefit 1 benefit, which in some exceptional cases lasts for one year, and if they are not entitled to the corresponding benefit. Hartz 4 benefits are also possible as an increase in the salary or the ALG 1 salary, provided the income is not sufficient for living expenses.
Bank loans at Hartz 4
As the job center’s services are sufficient to cover their livelihood and there is therefore no financial scope for loan repayment, banks are hesitant to grant an installment loan to Hartz 4 recipients. The best chances for a successful installment loan are the personal audition at the house bank for small loan amounts. Another option to successfully apply for an installment loan for the Hartz 4 recipient is to provide a guarantor or to borrow jointly with a co-applicant.
Since guarantees, in contrast to joint loan applications, can be declared invalid if the guarantor is obviously overreached, the bank must make significantly greater demands on its financial strength. At the same time, it has to convince itself that the guarantor is aware of the scope of his consent. The co-applicant must have a sufficiently high income to repay the loan, but the nature of the relationship with the Hartz 4 recipient is insignificant.
Under no circumstances can an installment loan for Hartz 4 recipients be obtained by providing incorrect information in the loan application, even if there is a corresponding temptation for loans advertised by some direct banks without proof of salary. Corresponding information is also required in the loan application if the submission of proof of income is not required. Incorrect entries authorize the bank to terminate the loan even if the loan is properly repaid and also constitute a crime.
Additional options for installment loan borrowing with Hartz 4
Hartz 4 recipients can take out a loan via platforms for personal loan brokerage. In the case of an installment loan for Hartz 4 recipients processed via such a platform, the loan seeker specifies the intended use of the amount of money to be raised in addition to the desired loan amount. At the same time, he describes his financial situation, including the Hartz 4 connection, openly.
The private lenders registered on the platforms often base their decisions on social criteria and the planned use of money. In order for the loan to be repaid as agreed, the Hartz 4 beneficiary agrees low credit rates.
The installment loan for Hartz 4 recipients via a placement platform is particularly suitable for low loan amounts. If the installment loan is to be taken for urgently necessary purchases, a loan agreement with the case manager in the job center is advisable, for which no interest is payable.