5 Best Personal Loans for Low-Income Earners in 2019

5 Best Personal Loans for Low-Income Earners in 2019
GUIDE

Advertiser Disclosure

Eric Bank
By: Eric Bank
Posted: August 20, 2019
Our popular “How-To” series is for those who seek to improve their subprime credit rating. Our articles follow strict editorial guidelines.

According to the Department of Housing and Urban Development, low-income families earn no more than 80% of the median income in their areas. While the national median family income in 2019 is $75,500, the number varies substantially from one location to another.

The good news is that low-income earners can access personal loans even with extremely low incomes, as low as $800/month, among the lender networks we profile in this article.

Short-Term Loans | Long-Term Loans | FAQs

Personal Short-Term Loans for Low-Income Earners

Short-term loans are designed to help folks navigate sudden cash shortages. Short-term lenders expect borrowers to repay the loan quickly, as the loans aren’t necessarily optimal over longer terms.

We recommend two loan-matching services — MoneyMutual and CashAdvance.com — for low-income earners seeking short-term loans. Both work with networks of lenders who offer short-term personal loans to consumers who are low-income earners, are unemployed, or who have bad credit.

  • Short-term loan of $100 to $1,000
  • Bad credit is welcomed
  • Large network of lenders
  • Loan decision as fast as a few minutes; funding as soon as next business day
  • Required: Income of $1000+/month and at least 90 days on job
  • Click here for official site, terms, and details.
             
★★★★

3.9

Overall Rating

Loan Amount Interest Rate Loan Term Loan Example
$100 to $1,000 200% - 2,290% Varies

See representative example

You apply for a personal short-term loan by filling out an online loan request form on a matching-service website. Generally, you have to be a U.S. resident age 18 or older, have a steady monthly income, and an active checking account. If you meet these standards, the service will circulate your loan request to its lending partners who, if interested, will respond with an offer to apply. You can fill out their loan application forms, which will ask about your income.

MoneyMutual requires a monthly income of $800 month to apply for short-term loans up to $2,500. The lenders on the CashAdvance.com network offer short-term loans of $100 to $1,000, but you must earn at least $1,000 a month and be employed.

Because each lender sets its own terms, the two matching services can’t tell you in advance what APRs and fees to expect. However, each lender that you apply to will disclose all loan terms before you agree to the loan.

Neither matching service requires you to have a good credit score to qualify for a loan. In fact, they specialize in loans to folks with bad or scant credit. The matching services are free to applicants, as the members of the lending networks pay the fees for the service.

Personal Long-Term Loans for Low-Income Earners

We recommend three different loan matching services to low-income earners who need long-term personal loans. Because these loans have longer terms, the loan amounts can be larger.

CashUSA.com offers loans of up to $10,000 to folks who earn $1,000 or more per month, after taxes. You can arrange a long-term loan with a repayment period up to 72 months. Another loan matching service we recommend is Bad Credit Loans, which will facilitate loans of up to $5,000 with repayment terms up to 36 months. PersonalLoans.com arranges loans of up to $35,000 to consumers who earn a minimum of $2,000 per month. Loan terms extend up to 72 months.

   
★★★★★

4.7

Overall Rating

Loan Amount Interest Rate Loan Term Loan Example
$500 to $10,000 5.99% - 35.99% 3 to 72 Months

See representative example

These three lending services offer loans to low-income earners, but also work with any applicants that have a steady monthly income from unemployment insurance or benefit programs. They also specialize in loans to applicants with bad or no credit. All three are free services.

Can I Get a Personal Loan with Low Income?

The loan-matching services we review in this article all prove that low income need not hinder your opportunity to obtain a personal loan. The process is straightforward, starting with filling out the matching service’s loan request form.

The members of the lending networks compete for your business, which means you may get the best possible offer. Each lender sets their own terms, including loan amount, APR, fees, and repayment schedule.

These lenders do not require that your income come from employment — any steady income may qualify you for a personal loan as long as it meets or exceeds the lender’s minimum income threshold. This can be from Social Security, disability, or unemployment benefits. Other sources may include pension benefits, annuities, and required minimum distributions from retirement accounts.

You need not have a good credit score to qualify for one of these loans. For example, PersonalLoans.com offers loans to folks with credit scores as low as 580.

Your income level may affect the terms of the loan. If you have a great credit score and high earnings, you’ll have no problem getting a loan on the best terms. The reason is that these borrowers are less risky, so lenders can afford to charge a lower APR. However, the APRs on loans to low-earning families are not bad, especially when you compare them to credit card advances, payday loans, and auto title loans.

APR Impact on Personal Loans

If you find it impossible to get a personal loan given your income, consider a secured loan, in which you use collateral to enable the loan. Typical collateral includes a home, vehicle, cash, and securities.

Do You Need Proof of Income for a Personal Loan?

You’ll find it almost impossible to get an unsecured personal loan without proving income. The reason is that the lender depends on your income to help you repay your loan.

Without proof of income, the lender has no assurance that you can actually afford the loan. That’s why the lender will want to see some proof of income, such as pay stubs, account statements, or other documentation.

If proof of income is not in the cards for you, consider your alternatives. A secured personal loan is fairly easy to get since you must post collateral equal to or in excess of the loan amount. If you own your home, a home equity loan or home equity line of credit (HELOC) can be great alternatives. Both allow you to tap the equity in your home, which is the excess of value over the mortgage balance.

Home Equity Loan vs. Credit Line

If you have a credit card, you can get a cash advance without any additional proof of income. If possible, use a credit card that offers low-fees for cash advances.

Less attractive alternatives include car title loans and payday loans. Both are expensive, with high APRs and fees. Payday loans are very short term and can charge eye-watering interest and fees. Alternatively, you can lose your vehicle if you default on a car title loan.

If you already have equity in a car or home, consider cash-out refinancing. This lets you convert some of your equity into cash. Naturally, this will increase the loan balance and reduce your remaining equity.

How Much Do You Have to Make to Get a Personal Loan?

Among the lenders we review in this article, the minimum earnings requirement comes from MoneyMutual, which will consider loans for folks with income as low as $800 per month. You can assume the amount of your loan will tie directly to your monthly income. The top-line loan limits may not be available if you just meet the income requirement, but each lender will have its own policy in this regard.

The CashUSA.com lending network is not far behind, requiring a monthly post-tax income of $1,000. Bad Credit Loans does not disclose its income requirements, but PersonalLoans.com explicitly states its minimum gross income threshold is $2,000. Remember, these are loan-matching websites, so the actual lender will specify its income requirements, which may differ from those of the matching service.

You may be able to meet the income requirement by combining two or more income sources. For instance, folks who receive disability benefits can work a certain number of hours per month. The combined income may be enough to qualify for a personal loan.

Similarly, senior citizens age 66 or older can collect their full Social Security benefits without any withholding. That means they can also work full- or part-time and combine their income streams to satisfy the loan requirements. Similar scenarios are possible if you receive a pension or annuity payments.

You may find it helpful to have a cosigner for your loan. Your combined incomes may be enough to enable you to get the loan amount you require.

Pros & Cons of Cosigned Loans

Cosigners often make the difference between loan acceptance and rejection, but there are several things to consider. Make sure both parties understand the risks of cosigning on a loan.

$800 a Month Can Qualify You for a Personal Loan

An annual income as low as $9,600 can qualify you for a personal loan from the lenders on the MoneyMutual network. Other reviewed loan-matching services offer loans to folks with annual incomes ranging from $12,000 to $24,000.

You can combine multiple sources of income and using a co-signer can increase your joint income. Be sure to compare APRs, fees, loan amounts, and repayment deadlines before you select the personal loan that works best for you.