Low-income loan – is it possible?

Anyone considering making a low-income loan must be aware that banks are more likely to offer high-interest loans in this case. As with all loans, the borrower should think twice about taking a loan, especially at low incomes.

preparation

preparation

If I want to apply for a loan from a bank despite a low income, then a good preparation is needed. First and foremost, it is important to compare the revenues to all expenses and to think about how much you would like the bank to offer to repay the loan. This amount should be such that, despite low income, the loan can be serviced until it is fully repaid. Who is not sure if his private credit is “clean”, should get a private credit extract and delete unjustified entries. The bank is likely to obtain information from a private credit bank before lending. As a future borrower you should also consider what collateral can be offered to the bank.

Credit despite low income

Credit despite low income

For small loan amounts (less than 3.000, – EUR) it may be that the bank does not need private credit information. Normally, however, the bank will demand self-disclosure, a private credit extract and collateral. Apart from that, the bank must of course be sure that the borrower, despite his low income, will be able to repay the installments on time.

Conclusion

It would be better to avoid unnecessary spending and save the required amount of money than to take out a low-income loan. Just when the income is low, unforeseen expenses can lead to difficulties in repaying the loan. Apart from that, it is of course difficult to find a bank willing to lend to low-income clients. Even if you get a loan, then you should be aware that due to the precarious financial situation, the interest rates are unnecessarily high. Especially with low incomes, it makes more sense to save than to burden yourself with credit installments.

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