If you want to apply for a loan, you should meet a number of requirements so that you can even get a loan. Up until a few years ago, it was even the case that only employees with a regular income or profitable companies had the chance to get a loan.
Certain customer groups such as the unemployed, students or low earners were denied the opportunity to obtain a loan. This article explains which options low-income earners now have and what online credit is for low-income earners.
What is special about an online loan for low earners?
First, it should be clarified who is officially classified as a low-income group. Low-wage earners are people whose monthly income does not exceed 400 USD. Either a low-income earner works as a mini-job or in a marginal job.
The online loan for low earners differs from an ordinary loan not only in that it is granted online, but also in its terms. In Germany, a large number of people are employed as low earners. From the lender’s point of view, granting a loan to a low earner is always a higher risk than with a customer who is in a normal employment relationship. In particular, the level of income and the type of employment with a marginal employment relationship cannot be compared to the security of a normal job or a full-time job.
While a full-time employee is better represented financially and can pay the agreed credit installments, small and unplanned expenses can make the low-income earner unable to pay a loan installment on time. For this reason, the interest on an online loan for low earners is higher on the one hand, and on the other hand the possible loan amounts and the terms are limited.
What else should you pay attention to?
Loans to low-income earners are usually only granted up to an amount of 3,000, with the term not exceeding 36 months. An important requirement that a low-income earner has to fulfill in order to receive an online loan for low-income earners is a positive Credit Bureau information. If you also have negative Credit Bureau characteristics with a low income, you can assume that you will not get a loan.
You can improve your chances of getting a loan by having a co-applicant. This is a second person who signs the loan agreement and steps in financially if you cannot pay the installments. This person can be a spouse or parent. However, you should bear in mind that the co-applicant is also liable for the loan, according to which he or she must also expect a negative Credit Bureau entry in the event of payment default.
You should also be careful on the Internet that you do not get a dubious loan offer. Therefore, you should inform yourself exactly about the offer and compare all offers with each other. This is the only way to find a suitable offer with acceptable interest rates and a good term.