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It’s not impossible to get a personal loan if you have low income. While many lenders have minimum income requirements, others care more that you have steady income versus a particular amount.
Still, even if you qualify for a personal loan with low income, carefully consider taking on debt if the monthly payments strain your budget. You may also have cheaper financing options than borrowing with a personal loan.
What is a low-income loan?
A low-income loan is simply a personal loan offered to consumers whose income falls at or below a specific income level. The Pew Research Center, which studies demographic and economic trends, defines lower income as three-person households with annual income below $48,500 (using 2018 data). The threshold for lower income can vary based on location and cost of living.
For personal loans, a low-income loan can refer to a lender having a low income requirement for borrowers.
Some lenders require a minimum income amount while others require only proof of regular income — regardless of the amount. For example, online lender Rocket Loans requires a minimum income of $24,000, while Upgrade doesn’t have an income requirement.
How to qualify for a personal loan with low income
Lenders consider multiple factors, including income, when evaluating borrowers. These are some strategies that may help increase your chances of getting approved for a personal loan if you have lower income.
Check your credit report for errors. Many lenders consider your credit history during the loan approval process. Therefore, make sure your credit report is free of mistakes, such as a misspelled name or falsely reported delinquency that could hurt your credit score and your chances of being approved.
List all income sources. Borrowers with low income can use income from traditional employment, freelancing or even a pension, depending on the lender.
Consider a co-signed or joint loan. Adding a co-signer or co-borrower to your application — particularly someone with a higher income and credit score — may make it easier to get a loan with a lower income.
» MORE: Best co-signed and joint loans
Ask for less money. The smaller the loan, the less risk for the lender, so requesting a smaller loan amount may help you get approved. A smaller loan can also mean lower monthly payments and interest costs.
Lower your debt-to-income ratio. Pay off any debts that you can in order to lower your DTI. The maximum debt-to-income ratio that most lenders will accept is 40%, though lower is better.
Lenders with no or low income requirements
Minimum income requirement
8.93% - 35.43%
$1,000 - $50,000.
5.44% - 35.47%
$1,000 - $50,000.
5.40% - 35.99%
$1,000 - $50,000.
5.97% - 29.69%
$2,000 - $45,000.
5.99% - 35.99%
$2,000 - $50,000.
Things to consider beyond income requirements
While shopping for personal loans, look not only at income requirements, but also at costs and terms.
Repayment terms. Typically, personal loans have repayment terms of two to five years. A longer repayment term means smaller monthly payments, while a shorter term means lower interest costs. If your monthly budget is smaller due to having a lower income, a longer term could make more financial sense.
The option to pre-qualify. Pre-qualifying shows your estimated rate and term before committing to a loan. It involves a soft credit pull, which means you can pre-qualify with multiple lenders to compare offers without impacting your credit score. If you accept the offer, the lender will do a hard credit pull, which can temporarily lower your credit score.
» GET STARTED: Pre-qualify for personal loans on NerdWallet
Personal loan alternatives for low-income borrowers
Government assistance. The Temporary Assistance for Needy Families program offers monthly cash payments to individuals with minor children. Those who meet its eligibility requirements, including employment status and income thresholds, can apply in their state.
Extra money. Consider a side hustle, like tutoring or walking dogs, to boost your income. Even a temporary gig may give you the extra cash you need.
Family and friends. A friend or family member may offer a loan with better terms and rates, but be mindful of the potential impact on your relationship.
Credit union loan. Credit unions typically have better rates and terms on personal loans than online and bank lenders. They also consider your history as a member during the application process, which can improve your chances of being approved for a loan.
Pawnshop loan. Pawnshop loans let you use an item as collateral to secure a loan. You and the pawnshop lender agree on the loan, terms and interest. Once you pay it off, you get the item back.