Not everyone who does a regular job has a high income. There are many occupational groups in which only a low income is paid despite the minimum wage. Be it because the job cannot be operated full-time or because even the minimum wage does not generate a high income. It is a fact that every month millions of workers have to calculate very precisely how they can best manage their expenses and how additional purchases can be integrated most cheaply. Not an easy task to be mastered. However, a loan despite low income can take some financial pressure off and important new purchases can be financed.
When to talk about a low income
As a rule, the banks and savings banks describe the income, which is below the attachment allowance, as low income. The seizure allowance for singles is currently 1,079.99 USD. This means that any USD earned below this limit cannot be seized. Anything above that can be attached. The garnishment-free allowance is always based on the marital status and the maintenance obligations of the person concerned. For married people with a dependent person, the allowance is, for example, 1,479.99 USD. With two persons subject to maintenance already at 1.709.99 USD.
If you have a low income as a borrower, it will be difficult to take out a loan. Because the banks always query the income when borrowing and check how much money could be attached in the event of a possible default. A loan despite low income is therefore only possible under very specific conditions.
The consumer loan as a loan despite low income
The easiest way to take out a loan despite low income is to opt for a consumer loan. The advantage of consumer credit is that it does not regard income as security. Because the loan is earmarked, the financed things count as security.
The consumer loan is offered by retailers, but also directly by banks. However, it is common for the loan to be taken out directly from the dealer from whom the purchased items are to be financed. This is the easiest and the offers in this regard are usually quite good.
The loan despite the low income with guarantors
Another option for taking out a loan in spite of a very low income is the addition of a guarantor. A guarantor is a person who uses the good creditworthiness to secure the loan. In the event of default, the bank will always contact the guarantor to claim the debt. The guarantor is therefore fully liable for the loan despite low income and should therefore be selected very carefully.
It is important that the guarantor has a good income. It should be higher than the actual borrower in order to really meet the security that the income is supposed to bring. It is also important that the guarantor does not work independently or as a freelancer, but can demonstrate a permanent employment relationship. It has also proven to be very advantageous if the guarantor is very closely related to the borrower. The spouse, children or parents are therefore particularly suitable as guarantors.
Don’t go unprepared for borrowing
If you are looking for a loan despite a very low income, you should expect from the outset that borrowing will not be easy. It is therefore important to prepare well for the application.
Anyone who carries out a comparison in advance knows, for example, where there are particularly cheap loan offers. In addition, it should then also be known which documents are required for the loan application. In addition to proof of income, this would also be an identity card or passport and the consent to query Credit Bureau, because without it there is no credit in Germany.