In order to be able to take out a loan from a bank, it is important that you as a borrower can meet a number of requirements. The traditional banks in particular, which still work with a branch system, are very conservative and rarely ready to soften these conditions. For all those who do not fully meet the requirements or cannot meet them, it will be a little more difficult to find suitable loan offers.
One of the prerequisites is that a decent income is available. Neat in the sense that this is based on a permanent job and is above the garnishment allowance. While permanent employment can still be easily traded, there are often difficulties with the level of income. On the one hand because the hourly wages are not particularly high, but on the other hand because perhaps only part-time work is done. For borrowing, this means that loans with little income have to be looked for and drawn on.
When is there little income?
There is always little income if this is below the garnishment allowance. The banks cannot seize the money below this limit if you are in arrears with payment in installments.
In Germany, the seizure allowance for a single person is currently 1,079.99 USD. Only the income that is above this amount can be seized by the bank or another competent body. If, on the other hand, you are married or have a maintenance obligation towards children, the limit for the garnishment allowance increases. How far must be checked individually. Loans with little income are therefore all those loans with an income below the attachment allowance.
What are the options for low income loans?
The opportunities for low-income loans are available, albeit limited. As a borrower of such loans, you should therefore always make sure that you improve your personal situation as much as possible in order to be able to draw on the best possible loan.
You are most likely to come into contact with a consumer loan. It is given by many retailers when you buy something there. In the case of consumer credit, the amount of income is secondary. Rather, it is important for the dealer that you have a good Credit Bureau and can refer to income that is over 450 USD per month. Even with a part-time job or unemployment benefit, you can take out a consumer loan.
If, on the other hand, you want a loan with the money from the loan at your free disposal, you should look for a second borrower who will help you with the borrowing. If he has a good income, your chances of being offered a good installment loan increase. This is not earmarked, so you can use the money from the loan completely freely.
If you want to try borrowing on your own, always contact one of the direct banks first. These are usually a bit more accommodating than traditional banks and are more likely to meet your loan request. Don’t expect too much, however. There will be no more than a small loan with a manageable term.
What collateral can accompany low-income loans?
If you absolutely want or need to take out a loan, it is important that you provide sufficient collateral. At best, get a second borrower or a guarantor. Perhaps you are married, so your spouse would recommend this part. Or ask a good friend or other family member to go with you on your way to the loan.
Always make sure that the loan amount is not too high and that the monthly installments are as low as possible. You may also have some physical collateral that you can offer the bank. The banks are always happy when the collateral risk is reduced by sufficient collateral and reward their efforts with a low interest rate.