Lending despite low income – is it possible?
Anyone considering a loan despite low income needs to be aware that in this case it is more likely that the credit institutions will grant them high interest rate loans. For all loans, the borrower should be particularly careful about borrowing, especially if his income is low. If, despite my low income, I apply for a loan from a house bank ..
First, it is necessary to compare the income with all the expenses and to consider what amount of money you would like to propose to the house bank to pay off the loan. This sum should be so high that the loan can be maintained until full repayment despite a low income. If you are not sure whether your scufa is “clean”, you should get a private credit extract and remove unauthorized entries.
Before lending, the house bank will most likely receive information from a credit bureau. As a future borrower, you should also consider the security you can provide to the principal bank. For small loan amounts (below 3,000 EUR), the house bank may not need private credit information. As a rule, however, the house bank requires a self-report, a private credit statement and securities.
In addition, the principal bank must of course ensure that the borrower, despite his low earnings, will be able to repay the leasing installments in a timely manner. It would be better to avoid superfluous expenditures and to save the required amount than to avail of a loan despite a low income. Unpredictable expenses, in particular with low yields, can lead to problems with loan repayment.
In addition, of course, it is difficult to get a house bank willing to lend to low-income people. Even if you receive a loan, you should be aware that interest rates are unnecessarily high due to the uncertain financial situation. It is therefore more logical to be frugal on low incomes than to be content with additional loan installments.