A loan is not indispensable in spite of, but because of a low income. If the regular cash inflows are just enough to cover the cost of living, there are hardly any reserves for purchases that can not be made without borrowing. A loan despite low income is harder to get than a consumer loan at a monthly earnings. However, there are certainly opportunities for credit.
An erroneous statement of income is not a suitable solution to obtain a loan despite low income. This is true even for the rare and only for low amounts existing offers for borrowing without proof of income. These too are linked to the demand for income. Anyone who purposely makes false statements due to the lack of verification must expect serious consequences in case of accidental detection.
What is a low income?
A uniform definition of low earnings does not exist in lending. The regular monthly income of the borrower must be sufficient for the livelihood and for the settlement of the loan installments. This requirement can be met by the applicant chooses a long term for a loan despite low income. This leads to a lower monthly repayment rate and thus facilitates borrowing with a low household income. In addition to repayability, many banks require a labor income that exceeds the seizure-free limit, so that if there is no repayment discipline, they can directly access the salary of a defaulting creditor.
For smaller amounts and longer maturities, it is conceivable that the budgetary accounts would allow loan repayment, while the labor income would be lower than the seizure limit. In this case, low-income borrowers choose a financial institution that satisfies with a positive test of repayment ability and does not insist on an income above the wage-earning limit. It should also be remembered that applicants for a loan often receive extra income despite low income.
These are not valued by many banks as revenue relevant to the revenue and expenditure account. Low-income earners with additional income thus pay attention before submitting the loan application to which financial institutions allow ancillary income to be included in the budget. Corresponding instructions are often only to be read indirectly in the award conditions. The clearest indication is that a bank requests additional income receipts as credit application facilities.
Lending despite low income
The easiest way is to get the credit despite a low income for needed purchases through a dealer. Most shops that offer installment waive the usual sums of money on the presentation of a proof of income and do not ask for the monthly earnings. The installment customer pays attention to the fact that he only enters as many payment obligations as he can reliably serve with his little income. At first glance, the use of the disposition credit also seems appealing in the case of low income.
Most banks require a regular, but not a high income to grant a discretionary framework. Nevertheless, the discretionary loan is not a reasonable solution for a low-income loan, because the interest payable to him are extremely high. Relatively easy to obtain and cheaper than the collection of the current account is a call-off loan. Some consumer banks offer such a loan in a limited amount of mostly three thousand euros for each customer and thus regardless of income. In many cases it is possible to take out a bank loan together with another applicant whose income is higher. Individual banks require an identical address of both customers for joint borrowing.
The provision of a loan guarantee is also possible, but represents the less appreciated form of support by most credit institutions. Their reluctance to provide a loan guarantee is based on the high claims of jurisdiction on their effectiveness, which is limited especially in emotional attachment of the bank client with his guarantor , Careful price comparison is indispensable for every loan despite low income. In addition to a low interest rate, the loan agreement should provide for the right to an occasional installment suspension, so that unexpected household expenses do not lead to repayment difficulties.
The organized personal loan with low income
As an alternative to traditional banks, there is an organized private loan for a desired loan, despite low income. The applicant submits his loan request via a platform for the intermediation of credit between private individuals, describing the project to be financed as accurately as possible. He gets the desired loan despite low income paid as soon as the private lenders have drawn the desired loan.
Lending is possible through one or more members. The private loan platforms recommend a detailed specification of the intended use, but do not prescribe them in a binding manner. However, the experience of the users of the respective platforms shows that the most accurate project description is indispensable for a successful private loan application. By far the most private lenders use their drawings to decide less on classic creditworthiness than on whether they want to support a given purpose of credit.