Citizens’ allowance has been in existence since the beginning of 2023. It has replaced Hartz IV and is intended to be better, fairer and more modern.
But people receiving citizen’s allowance have a lot of questions: Will the job center cover my increased electricity costs? Am I allowed to go on vacation as a citizen’s allowance recipient? Will I get more money as a single parent with a child? And also: Can I apply for a loan as a citizen’s allowance recipient?
The washing machine is broken, the child urgently needs winter clothes or you want to buy a new television. Such purchases are generally not possible with the standard citizen’s allowance alone, there is nothing left to save. So the only option is a loan. Whether you can apply for a loan as a citizen’s allowance recipient, how it works, where you do it and how good your chances are: all the important information at a glance.
Citizens’ allowance and credit: Is that even allowed?
In principle, it is not forbidden for people receiving citizen’s allowance to apply for a loan from a bank. It is just very likely that it will be futile. Banks generally require a regular, secure income before they will grant a loan. Citizen’s allowance is not included in this. It is therefore very unlikely that people receiving citizen’s allowance will be successful in getting a loan from a bank.
In addition, banks often require a Schufa test when applying for a loan. If this is negative, a loan is almost impossible. So beware of dubious offers on the Internet. This can quickly become expensive. So what other options do you have as a citizen’s allowance recipient if you want to apply for a loan?
Citizens’ allowance: Loan from the job center
The only serious option you have as a citizen’s allowance recipient is a loan from the job center. You can apply for this informally at your local job center. But it’s not quite that simple. Because unlike a loan from a bank, the loan from the job center must always be earmarked for a specific purpose, as the federal portal explainsSo you can’t just apply for an amount without specifying what you need the money for.
Added according to the Federal Employment Agencythat the need must be “unavoidable”. This is the case when:
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the need cannot be postponed and therefore a loan is essential to avoid an acute emergency situation
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it is not foreseeable that the need can be met with the next standard rate of citizen’s allowance issued
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there is no other way to meet the demand (for example through a second-hand goods warehouse)
Typical examples of an unavoidable need:
If there is an unavoidable need, the job center can grant the application for a loan.
Loan with citizen’s allowance: How do you apply for a loan at the job center?
You can initially apply for a loan from the job center without any formalities. The job center will then contact you and inform you of the documents required to process the application. A cost estimate will usually be necessary so that the job center can determine the amount of the loan. You must also prove that the need is unavoidable.
If the citizen’s allowance recipients have assets, these must be used to make a purchase before a loan can be applied for. The job center will grant a loan for exactly the amount that is needed to cover the needs. In addition, the money must be used for the needs; if necessary, the job center may ask for proof of purchase.
Loans as a citizen’s allowance recipient: How do you pay the money back?
The good news is that a loan for people receiving citizen’s allowance is interest-free, so the amount owed does not grow over time. However, you still have to pay the money back. If you continue to receive citizen’s allowance, the loan is deducted from your standard needs every month. If only one loan is applied for, ten percent of the standard rate is withheld every month until the loan is paid off. This begins in the first month after you receive the loan. If you have multiple loans, up to 30 percent of the standard rate can be deducted.
