A loan despite Social Welfare is not so easy to get. The main reason is the Social Welfare benefit. This is not a work-like income, but a social transfer benefit. This social transfer benefit is linked to the need. In contrast to the pension, which is ultimately income without work, it is not a loanable amount. A creditor therefore has little chance of getting his money back if the debtor does not pay.
A loan despite Social Welfare from private sources.
The credit despite Social Welfare can only come from sources other than the normal house bank because Social Welfare does not represent a reliable income per se. Unless a solvent guarantor advocates it. Then it could be, especially with long-standing customer relationships, that the house bank still sees opportunities. As a rule, however, this is rather difficult due to the clear requirements of the banks for lending.
A possible alternative to get a loan despite Social Welfare would be the private loan. On the one hand, friends or acquaintances come into question or the private credit market. In this sector of the banking industry, investors are much more willing to take risks. This willingness to take risks, however, can usually be paid very well. The cost of a free market personal loan is often quite expensive under difficult circumstances. They are often hidden in fees. Taking out extra credit insurance can also be expensive.
In principle, people who rely on the support of Social Welfare should generally try to avoid loans. In most cases, state support for life is really only sufficient to secure the basis of life. Free funds, for example to repay a loan, are hardly available in this narrow budget. The likelihood of having repayment difficulties later is high.
With a loan out of Social Welfare
There is a way for young people that leads from Social Welfare, but includes the taking out of a loan. It is the student German State Funding. The instrument was created in order not to make the possibility of studying dependent on the income of the parents. For example, if you had to wait for a place to study, taking advantage of Social Welfare, this loan is a real future prospect despite Social Welfare. German State Funding is granted on application.
It secures the basis for the study. It will only be repayable far into the future if a job is taken up after graduation. With the start of a course of study, the right to Social Welfare support also expires. Students can use their own resources to improve their situation and build a future without social transfer benefits.
Loan to Social Welfare while working.
If you are working, but the income is so low that you receive Social Welfare as a support, a loan can be decisive for maintaining mobility. In this case, it is advisable to consult with the supervisor whether there is a supportive measure from the state. The state is interested in Social Welfare recipients keeping a job, even with low pay.
In principle, a loan is a possible thing in this life situation, but it is not easy to obtain. The general consideration should also be well thought out. Otherwise, despite Social Welfare, the loan could become a debt trap.