As is well known, those who receive social assistance do not have much financial leeway – because social assistance or Alg 2 is intended to cover the basic needs of the person receiving the benefits – everything that goes beyond the basic needs for food, clothing, rent and education, is considered a luxury and is therefore not paid for by the office. So what are the chances of getting a loan despite social assistance?
You could answer this question with a short sentence: The chances of getting a loan from a bank as a welfare recipient are extremely poor. But this would not do justice to this topic, because unemployed people who receive Alg 2 may look rather bad with normal installment loans, but still have the opportunity to get loans through detours.
It is clear that people without work and income who cannot provide collateral accordingly – otherwise they would ultimately not be entitled to social assistance or unemployment benefit 2, are virtually out of the question for a normal installment loan, with or without collateral.
However, banks often offer that if the borrower does not have sufficient creditworthiness, which is the case with a missing job or a lack of income, the borrower names a second person in the loan agreement, on whose behalf the loan should also run. The banks currently call this procedure “loan with two borrowers” – but it is simply a guarantee loan.
To what extent you can find a second borrower / guarantor is of course a question – because it is clear from the outset that with the monthly benefits that you receive from Alg 2, you cannot manage credit rates. Therefore, you should be aware that the guarantor is the actual borrower and, depending on how you stay with the guarantor, you will repay the loan installments in small amounts or later, if you are financially better off, to the guarantor.
There is a constant rumor going around the internet that the employment agency and the social welfare office are also granting loans – but this is only true insofar as they are advances for the next month, which are only approved in large exceptional cases.