Mini-jobbers, part-time workers or auxiliary workers – all have one and the same problem: they go to work and only receive a small salary for the services they provide. As long as there is still a partner who can support the family with a good salary, this may not seem too much of a problem at first glance. Because then there could be enough money as a whole to lead a comfortable life as a family.
Problems only arise when a loan is to be taken out with the help of the low salary. Then it quickly becomes clear that the requirements for borrowing and the current situation of the borrower do not match. In order to be able to use a loan with low salary despite all of this, there are a few things to consider in advance.
When is a low-salary loan mentioned?
A low income or a low salary is always spoken of when the monthly salary is less than 1,000 USD. Then they are below the garnishment allowance and thus within the amount that must be regarded as a basic service and therefore cannot be garnished.
This is exactly what is important for banks and savings banks. Should there be payment difficulties, you can only seize money that is above the seizure allowance. Therefore, they are not particularly enthusiastic when a low-salary loan is requested because they have little opportunity to enforce the debt through legal means.
How can a low salary loan be put into practice?
For you as a borrower, this means that if you have a low-salary loan, you have to give good arguments in advance to convince the bank to grant you a loan. Among other things, you can do this if you involve a second borrower to apply for the loan.
Make sure that the second borrower is solvent and has a high and steady income. He should also be very close to you, so that the bank has a real contact in the event of default.
You could also seek consumer credit. Although this is earmarked, it has the positive feature that the lending institutions do not ask for collateral in the form of a high income. This means that a good Credit Bureau is important for a consumer loan. You also need monthly income, which should be over 450 USD. Where that revenue comes from is secondary, since the financed items you bought with the consumer loan are considered collateral. You can get a consumer credit from many retailers and also on the Internet.
It is also possible to take out a personal loan with a small income. Here, however, the offers should be explored very well, otherwise it can happen that you have to pay very high interest. In addition, we only recommend the personal loan if you cannot avail an installment loan with a second borrower and also no consumer loan.
How can the credit decision be influenced positively?
In addition, as a borrower, there are a number of things you can do to steer the bank’s credit decision in the right direction. Gather all the documents you need for the application. Also look for collateral that you can offer the bank along with a second borrower. Perhaps you have taken out capital-forming insurance or you have valuables.
If you can prove the bank’s value and this is sufficient to secure the loan, this will have a positive effect on the lending. Otherwise, it is always good to think about residual debt insurance in your situation, which will cover the outstanding installments in the event of unpredictable unemployment, incapacity for work or the death of the borrower and pay them to the bank. This is also considered security, which works well for a loan with little income.