Loans with little income

To be able to take out a loan from a bank, it is important that you as a borrower can meet some requirements. Especially the traditional banks, which still work with branch system, are very conservative and rarely willing to soften these requirements. For all those who do not quite meet the requirements or can not meet them, it is therefore somewhat more difficult to find suitable loan offers.

Among the requirements is that a decent income is available. Ordinary in the sense that this is based on a permanent job and is above the garnishment allowance. While permanent employment is sometimes manageable, the amount of income often causes difficulties. On the one hand, because the hourly wage is not particularly high, but on the other hand, perhaps only part-time work. In terms of borrowing, this means seeking and taking advantage of low-income loans.

When is spoken of little income?

Low income is always spoken of when it is below the garnishment allowance. This is because the banks cannot seize the money under this limit if you default on the installment payment.

In germany, the garnishment exemption amount for a single person is currently 1.079,99 euro. Only income above this amount can be seized by the bank or other competent authority. If, on the other hand, you are married or dependent on children, the limit for the garnishment allowance increases. How far must be examined individually. Loans with little income are therefore all those loans where there is an income below the garnishment allowance.

What options are available for loans with little income?

Opportunities for low-income loans are available, albeit limited. As a borrower of such loans, you should therefore always look to improve their personal situation as best as possible to be able to take advantage of the best possible credit.

You're most likely to come into contact with a consumer loan. It's awarded by many retailers when you buy something there. With consumer credit, the amount of income is secondary. For the dealer it is more important that you have a good schufa and can point to incomes that are above 450 euros per month. Even with a part-time job or even unemployment benefits, you can take out a consumer loan.

If, on the other hand, you wish to have a loan where the money from the loan is at your free disposal, you should look for a second borrower who will assist you in obtaining the loan. If this has a good income, your chances of being offered a good installment loan increase. This is not earmarked, so you can dispose of the money from the loan completely freely.

If you want to try taking out a loan on your own, then always turn first to one of the direct banks. These are usually a bit more accommodating than traditional banks and are more likely to accommodate your loan request. However, do not expect too much. More than a small loan with a manageable term will not be possible.

What collateral can accompany loans with little income?

If you absolutely want or need to take out a loan, then it is important that you provide sufficient collateral. In the best case, get a second borrower or a guarantor. Perhaps you are married, so that your spouse would be recommended for this part. Or ask a good friend or other family member to walk the path to credit with you.

Always make sure that the loan amount is not too high and that the monthly installments are as small as possible. You may also have some tangible collateral that you can offer the bank. The banks are always happy when sufficient collateral reduces the risk of default and reward your efforts with a low interest rate.