People with a low income in particular are often dependent on a loan because their financial planning leaves little scope for additional expenses and even rather minor additional expenses such as the need to buy a new washing machine lead to financial difficulties. A bank with a low income loan is difficult to obtain.
Alternatives to bank loans
Instead of taking out a bank loan, people with low income can agree to pay in installments with the supplier. In this case, only a few retailers query the amount of income, but they are mostly satisfied with the presentation of an EC card and a Credit Bureau query. Another way to apply for a loan for people with low incomes is provided by websites that provide loans from private individuals to private borrowers.
For legal reasons, the formal processing of these loans is carried out via a bank, but the actual credit decisions are made by investors, since they alone decide which applications they want to grant a loan for. A loan from a pawnshop is possible for every borrower, the only requirement is possession of an item suitable as a pawn.
Since the pawn is the sole security of the pawnshop, the employees do not ask questions about the amount of income. For urgently necessary purchases, there is also a right to a one-off loan from the social welfare office. In any case, there is a particular demand for families, especially since the office grants a loan without interest.
Low income bank loan
In principle, a low-income loan is also conceivable with a commercial bank. The credit institutions check whether the applicant can properly repay the loan taken out in accordance with the agreement reached.
Those who have a low income can significantly reduce the amount of the monthly repayment by agreeing on a longer term, so that the bank can grant the loan applied for despite the low income. The use of a possibly available overdraft facility is not sensible for households with low income due to the high interest rates.