A loan is often taken out when there is insufficient funds. This can be a loan for a new car, a vacation trip, a new kitchen or a television. In particular, buying a house is often financed through a loan.
Before you apply for a loan, you should find out how much credit you get on what income? You can find out easily and conveniently with a household calculator and a loan calculator or loan comparison.
Factors that are crucial for credit approval
If you want to apply for a loan, you should know that there is basically no direct minimum income for a loan. It can happen that a loan seeker who earns 3,000 dollars net receives a loan rejection. A loan seeker with 900 dollars, however, gets a loan. When lending, many factors play a role in getting credit approval.
In addition to the minimum income for a loan, existing liabilities, the credit record score, the fixed-term employment relationship, sufficient equity and possible loan guarantees, your loan will be rejected.
What is the minimum income for a loan?
However, a fixed monthly income must be available in order to guarantee the repayment of a loan. Unemployed people who do not have collateral, for example, are often rejected directly because social benefits do not count as income for the banks. In most cases, the minimum income for a loan prescribed by banks must be above the garnishment exemption limit. The current garnishment exemption limit is 1100 dollars net. However, there are banks that provide a loan with a minimum income of USD 901.00. The maximum loan amount is based on the customer’s income and ability to pay.
A loan is also based on the excess liquidity. This means that after deducting all expenses, there must be a residual amount that can possibly be used for the credit installment. The bank will check this with a small budget bill. Banks check this against the submitted documents, such as bank statements from the past three months and proof of salary. However, some lenders also require a copy of the employment contract.
Requirements for the minimum loan income
If you are looking for a loan, you should first apply for a loan. However, you should make a condition request here instead of a loan application. Loan seekers can find a suitable provider with a loan comparison. To find out the personal interest rate, it is first necessary to send a condition request to the lender. This provides loan seekers with a loan offer tailored to their needs. If this does not appeal to the customer, he can easily reject it.
How can you increase your credit opportunities?
If you are looking for a loan, you should bear in mind that borrowers with permanent employment and sufficient income have better credit opportunities than, for example, an unemployed person or a mini-jobber. Those who do not earn enough or who have bad credit can increase their credit opportunities and thus the maximum loan amount with so-called collateral loan. This can be real estate or valuables. But a solvent guarantor or second borrower can also increase the credit opportunities. If a guarantor is found, borrowers should make sure to pay the accruing loan installments correctly. If this does not happen, the guarantor is brought into recourse. So you can see that a guarantee is not a short walk, but a responsible task.
Does it have to be the maximum loan amount?
If a loan income is taken up, borrowers should also pay attention to the terms in addition to the affordable loan amount. A short term means that the loan is paid off quickly, but higher installments must be paid. A longer term, however, has lower rates. Even if the necessary conditions are in place for the borrower to be able to pay higher loan installments, the borrower should never go up to the maximum loan amount. A longer term can then lead to the fact that any suddenly occurring purchases can be better paid. So there is no need to borrow again. Therefore, only as much credit should be taken out with a certain income as is actually needed. For example, many borrowers drive an expensive car. If repairs come up, the financial situation can worsen very quickly if the entire income is used up for the loan installment.