Obtaining a loan in spite of a small income tends to be possible,

Obtaining a loan in spite of a small income tends to be possible,

Its because the direct banks on the internet have somewhat looser admission conditions compared to house banks. Nevertheless, the situation for the prospective borrower (and also for the lender) is by no means an ideal idea for a loan agreement. Because the lender, i.e. the bank, must of course sufficiently secure their own investment, after all, they want to earn money by issuing the loan.

In the end, this will only go really smoothly if the borrower is able to pay his installments on time, in full and regularly. The borrower, on the other hand, has little scope due to his small income, which would actually allow an additional burden from the installments. As a result, not only the credit line of the data subjects decreases, but also their creditworthiness, which in turn is determined by the bank.

As a rough guideline, even if this naturally varies from bank to bank, a loan is issued with a minimum income of around 750 euros net. Of course, with such a low income, only small or micro-loans with a relatively long term are actually possible, since this will reduce the monthly installments and allow the installments to be paid on time despite the lack of income.

The loan in spite of a small income is therefore quite possible, but in connection with the small income the Schufa entry should at least be flawless – otherwise the lender will quickly reject it.

Focus on small and micro loans

When evaluating the creditworthiness, the bank also defines the credit line for the applicant and future borrower. The higher his income and the better his overall financial situation, the higher his credit line. This framework specifies the maximum amount of a loan, which is why it is rather tight when the income is low. A loan in spite of a small income can often best be found using a loan calculator, since in addition to the general conditions and total costs, the acceptance rate of the lender is also recorded here.

If this is relatively high, even borrowers with a low income still have relatively good chances of getting a loan. Nevertheless, you should also consider out of your own interest whether the loan is actually absolutely necessary. Especially with low incomes, there is a high risk that you will quickly become over-indebted, which can lead to high follow-up fees due to dunning costs if payments are not made on time. Borrowing should therefore be considered carefully, also because a guarantor may have to be used for the loan agreement.

This guarantor increases the creditworthiness of the borrower considerably, but in the closer private environment there has to be a person who is actually willing to vouch for the loan. If a guarantor has been found, a loan is almost certain despite a small income.