Income – too low, not attachable, unsafe
If the salary is too low, loan applications are often rejected because the risk of default is too high. In particular, the unemployed, low-income earners and students mostly do not receive a loan. You are considered a low earner if you earn less than 400 USD a month. Even if your salary is too close to the statutory garnishment limit, the chances of getting a loan are slim. Nevertheless, the salary does not play the sole role when it comes to obtaining creditworthiness. The following factors affect whether you get a loan despite low income:
- Housing: If you don’t have to pay rent, this improves your chances of getting a loan because the monthly financial burden of the rent is eliminated. If you own your own property, this can also serve as security.
- Guarantor: If you have someone who guarantees you at the bank, this can compensate for a low income. Of course, the guarantor must also have appropriate security in the form of his income or property.
- A second borrower: If you apply for a loan not with someone else but with someone else, the income of both applicants will be taken into account. It may well be that the bank approves the loan.
In addition, you should of course also realistically adjust the amount of the loan applied for to the amount of your income and accept the bank’s claims linked to the lending.
Special loans for low earners
Many banks offer special loans for low earners. These have different terms than conventional loans and differ in
- the loan amount
- the amount of interest as well
- the term
of conventional loan offers. While the approved loan amounts usually do not exceed 3,000 USD, the interest rates are significantly higher than with conventional loans. The maximum loan term is usually 36 months. A positive Credit Bureau information is also a basic requirement so that you can get a special loan for low earners.