The most important questions about Baby Loans!
Within the framework of the Family Protection Action Plan to be launched on 1 July 2019, the Baby Waiting Loan was introduced.
- HUF 10 million interest-free loan,
- free to use, to spend on anything,
- no real estate collateral,
- Depending on the number of children born, the loan may even become a government grant.
You can find more detailed information about the Baby Waiting Facility in our earlier article.
With the introduction of Babavár subsidy, because its conditions are so favorable (interest-free, it can turn into government subsidy, it is freely usable), even young married couples who have not planned to borrow before have been thought of. Before applying for a loan, however, it is advisable to seek the assistance of a credit broker, as Baby Waiting Support can only be applied for once and is determined by the couple’s income and the credit regulations of each credit institution.
Let’s look at a few questions about Baby Waiting Credit
Looking back on the first one month, the Baby Waiting Support has gained tremendous popularity. It was claimed by thousands of families who had their children born after July 1st. Statistics suggest that families who have not previously applied for a loan are also applying for the Baby Loan, as demand for other types of loans – home loans, personal loans – is not falling. This is not surprising as there is not much more favorable form of this construction on the market.
What Is The Difference Between A Baby Waiting Loan And Other Loans?
Baby Waiting Support is an unsecured loan , so it is a bit like a personal loan, but the amount you can claim is much higher than a personal loan. It can also be claimed with a lower income, as it is interest-free, so the installment is much lower than a personal loan. It has a maturity of 20 years, which is more like a mortgage loan, but in terms of applying it is more like a personal loan because it has a 10-day maturity. Requesting a TB certificate, which the applicant must obtain, can extend the application process. Very important information is that the Baby Waiting Support is only available until December 31, 2022, after which this form of support will not be available.
When is the Baby Waiting Room available?
To be eligible for Baby Waiting Support, applicants must meet the following conditions:
- can only be claimed by married couples,
- not appear on the KHR list as a negative debtor,
- at least one of the parties must have a continuous TB relationship for at least 3 years,
- cannot be NAV and their public debt,
- have a criminal record,
- the female member of the couple must be between the ages of 18 and 41 (although some credit institutions only accept applications over the age of 21).
Why is Baby Loan unique?
The Baby Waiting Loan is interest free ! The state undertakes to pay the interest subsidy so that the claimant does not have to pay interest on the loan taken. Currently, there are no other such constructions on the market, especially in such a large amount. Since the loan is interest-free, it is worth applying for a maximum term of 20 years as the repayment amount will increase with the extension of the term. However, at least one child is born in the family within 5 years of enrollment.
Another benefit of the Baby Waiting Support is that it is freely usable , meaning it can be spent on anything, without the need for real estate coverage.
The Baby Loan includes additional subsidies in addition to the interest-free loan. If the second child is born after claiming 30% of the family’s outstanding debt , if a third child is born, the total debt will be forgiven . An additional benefit is that after the 12th week of pregnancy you can request a suspension of the baby loan for 3 years. We do not find much more favorable construction on this market than this loan.
Only High-Income Customers Available?
No, not only high-income couples can apply for a baby loan. Since the installment of the Baby Waiting Support is capped at 50 thousand HUF, it is also available to families with lower incomes. However, it is important to know that this loan is also subject to the GFI (Income Duty Ratio), so the claiming couple’s income must be at least double the repayment installment. However, credit institutions may have stricter rules, so you should seek the help of a credit broker who is familiar with banks’ internal regulations so that you can find the financial institution where you can claim the highest amount for a given income.
Taking these conditions into account, it can be said that in the vast majority of cases an average earning couple may receive the full amount of the Baby Waiting Loan.
What can you do if your family already has credit?
Because Baby Waiting Grant is subject to the GFI Rule, the repayment installment of existing loans reduces the family income that you can use to pay off the Baby Waiting Loan installment. However, the law allows the Baby Waiting Loan to be used by the claimant to replace previously taken out loans. It is worth calculating with the help of credit brokerage experts how much the reduction of the burden on the family budget would be if the existing loan or loans are replaced with the help of Baby Waiting Support. Since the loan is interest-free in the vast majority of cases, this amount can be up to thousands of forints.
Are you really less risky than a market home loan?
There is no greater risk than a market home loan or personal loan. The vast majority of long-term loans, such as home loans, are variable interest rates that can be fixed for a specific interest period (5 years, 10 years, etc.). As interest rates rise, the installment may also increase after the fixed period. Baby Waiting Support is interest-free, so the increase in interest rates does not affect the installments, and the amount of the installment is legally maximized at HUF 50,000, so they cannot be higher than this amount.
However, depending on the number of children to be born, the Baby Loan may turn into a state subsidy, so in the case of married couples planning to have a larger family, most of the loan repayment will be undertaken by the state.
Can the installment amount increase during the term?
According to the applicable law, the repayment installment is capped at HUF 50,000. This means that if a couple claims full support and meets the legal requirements, such as having a child born within 5 years of applying, the loan will be free of interest until the end of the term and if the maximum amount is raised, the installment will be around. Of course, if the maximum $ 10 million is not charged, the installment will be less than the amount mentioned above.
An increase in the installment payment can only occur if the legal conditions are not met (for example: no child is born within 5 years, the couple divorce). In this case, the loan becomes a market-rate loan and the interest subsidy received is repaid. However, in this case the claimant was no worse off than borrowing at market rates.
Are there any other costs for a Baby Waiting Loan?
No credit institution charges any disbursement, credit assessment, or prepayment for the Baby Waiting Loan. All you have to do is pay the state guarantee on the loan. This fee is about half a percent of about $ 4,500. However, it can be seen that even with the guarantee fee, this is the most favorable form of credit on the market.
Can Baby Support be combined with State Aid?
Of course, yes, besides the GFI, the village GFI, the interest-subsidized loan, but even the car purchase subsidy. It is worthwhile to seek the help of a credit broker, as the conditions of support are different and finding the right combination can save your family thousands of dollars a month.
All in all, the Baby Waiting Loan is one of the most advantageous schemes on the market. Due to the lack of coverage and free use it is worth taking advantage of young married people. The interest-free installment is an additional reason for using the Baby Waiting Support and does not require a high income. That is, Baby Loan is an easy and fast interest-free loan that should not be missed. However, it is important that you choose the date and purpose of your loan well. Because Baby Waiting Support can only be claimed once.
If you would like to apply for Baby Waiting Support or are interested in an expanded GFI, please fill out our form and our credit broker will be looking for you!