Are you considering a low income loan? Are you wondering whether you are qualified for an installment loan or at least a short-term loan?
We want to help you find your way around more easily. Instead of applying for a specific loan, we give you the information that could lead you to the desired loan.
Find out what is important for the credit institution to grant installment loans with a lower income and how to make the most of your credit opportunities.
Loans without high income – what is meant?
Subjectively, every boss is more than welcome to transfer more wages. In this sense, the desire for a high-income loan applies to almost all borrowers. Fortunately, the subjective feeling of making little money has no influence on whether a borrower receives the loan of his choice or not. There are objective characteristics that are used for credit assessment.
The objectively determined creditworthiness through the score plays an important role, of course based on a clean Schufa. It shows that there is enough money in the household budget to guarantee the loan repayment within the agreed framework. The last important decision factor is actually the amount of income. For regular loans, the credit institution requires an attachable share of income.
For example, if singles with a monthly net income of $ 1300 are looking for a credit without a high income, they are unlikely to encounter any problems. The income may not be high, but it exceeds the garnishment exemption limit (USD 1089.99) as long as there are no maintenance obligations. Already with a dependent person, for example a single mother, the signs change significantly.
Loan with income at the garnishment exemption limit
Regular loan offers currently impress with extremely low interest rates. The Cream Bank is responsible for the low interest rate. Unfortunately, low interest rates have more than one downside. Not only savers actually lose purchasing power for their savings, but low-income borrowers are also affected. The bank or savings bank hardly makes any money from the installment loan.
This excludes increased credit risks for lending. Without being able to create provisions from profits, no loan that has been approved should become a problem. Loans without a high income cannot provide the required security due to the level of income and a sufficiently high attachable share of income. With a low income, the risk of late payment is also much higher.
If there is only no overtime for a while, shift supplements or dirt allowance are no longer necessary, the household budget will run short. A simple car repair that can affect everyone quickly turns into a big problem on a small budget. Accordingly, banks and savings banks are usually at a distance from small-income installment loans. Additional collateral for the loan is required to obtain the approval.
Regular installment loan without high income
The security of lending is not negotiable with regular installment loans and low interest rates. Negotiations can only be held on how it is possible to create the necessary credit security. From the point of view of the credit institutions, there are two basic options for this. Either an additional human loan holder secures the loan or valuable property security is pledged.
The easier way would be for the bank and the borrower to get a high-income loan with a solvent guarantor or co-applicant. As soon as a guarantor or a second borrower becomes liable, the cards are reshuffled. Now the common credit rating counts for the lending. The good reputation of the co-partner guarantees the security of the loan. The level of income and the attachable portion of income of the original applicant are secondary.
It is not quite as uncomplicated to offer a valuable thing for real security. It is only simple if the real value far exceeds the loan amount. For example, retirees with a small pension can easily get credit if they have a paid home. Without real estate security, the clerk probably won’t even look at the loan application before declining it.
Short-term or installment loan – important for small income
The credit institution does not have to apply the same high standards of credit security to every loan request as it does with installment loans. Advantages for the desired loan without high income can be derived if a short-term loan would be sufficient. Short-term loans, such as overdrafts, do not lead to the bank’s long-term contractual commitment. They can be easily removed at any time.
In addition, credit institutions earn sufficient interest on short-term loans. Taken together, both open up room for maneuver for the house bank clerk. He can grant credit in a relatively uncomplicated manner that would not be possible as an installment loan. If the house bank is not eligible for the desired short-term loan, the online loan market offers alternatives. For example, Good Bank from Berlin specializes in the granting of external short-term loans.
The offer for credit without high income through lightning loans with a small credit volume is well known. First-time applicants may apply for a loan of between $ 100 and $ 500, proof of income is sufficient. Good Bank sets the term for new contracts at 30 days. Follow-up loans could include a credit volume of up to 5000 USD with a maximum term of six months. If you are in a hurry, a loan with a payment in 30 minutes would be possible.
Installment loan with small income
It is not just banks that provide high-income loans. A private loan could be much more interesting than a strictly regulated bank loan. Serious offers for private financing would be available through Good Finance, for example.
Private lenders have a reputation for taking higher credit risk than banks. From a private point of view, credit without a high income would even be conceivable, although credit institutions previously rejected the request.