When you make a loan application, the bank first checks your credit rating. The private credit, the scoring procedure and the evaluation of economic performance play an important role. A loan is only granted if all criteria are met and the bank classifies the risk as relatively low. If you want to get a loan despite low income, you have to earn so much that after deducting all expenses, there is still enough money left for the monthly repayment.
What are the requirements for borrowing?
Most banks assume that the income of the loan applicant exceeds the exemption limit of € 1,000. If you’re single, you’ll need to earn more than $ 1,000 to be considered creditworthy by the bank. For married couples and families with children, of course, a correspondingly higher income must be demonstrated. Apart from that, it is important that you receive your income through a job or a pension. Social benefits such as unemployment benefits, parental allowance and sickness benefit are not counted as income. Alimony payments and child benefits are also non-payable income.
What can you expect from the loan despite low income?
If you can prove enough collateral and your income exceeds the minimum, you may well get a loan. However, you have to expect that the conditions are significantly worse because of your low income. Borrowers without 1A credit are usually burdened with high interest rates, since the default risk is higher for a low income and the bank would like to suffer no loss.