Best Personal Loans for Low-Income Earners

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For borrowers with a limited income, navigating financial difficulties can be a challenging task. Unexpected expenses can be difficult to cover on top of regular monthly bills, and getting approved for a personal loan can be even harder due to the low income.

However, there is hope and help available. Many lenders are open to providing assistance to those in need, despite their financial status.

5 Personal Loans for Low-Income Individuals

Listed below are five lending marketplaces that are suitable for low-income borrowers.

1. CashUSA

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  • Loan Amount
    $500 – $10,000
  • Loan Term
    3 – 72 months
  • Minimum Credit Score
    Flexible
Overview

CashUSA is another online lending marketplace that offers personal loans that range between $500 to $10,000, with interest rates ranging between 5.99% and 35.99%.

When you apply on the company’s website, you’ll start by filling out a loan request form. Once you’ve finished the application process, you’ll begin receiving offers from lenders. If you accept one of the low-income loans offered to you, you will finalize the process with the lender.

Here are the requirements you’ll need to qualify for low-income loans from CashUSA:

  • Be at least 18-years-old
  • You must be a U.S. citizen or permanent resident
  • Provide a valid phone number and email address
  • Minimum income requirement of $1,000 per month after taxes
  • Have a checking account in your name

2. MoneyMutual

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  • Loan Amount
    $250 – $5,000
  • Loan Term
    Varies
  • Minimum Credit Score
    Flexible
Overview

MoneyMutual is an online marketplace that specializes in working with consumers that have poor credit scores. The company offers quick, short-term loans for up to $2,500.

However, MoneyMutual will not be the company lending you the money. Instead, they match you with qualified lenders who are who specialize in bad credit and low-income loans. Some of their lenders charge an origination fee, so make sure you know how much it is.

To eligible for a low-income loan from MoneyMutual, you must meet the following requirements:

  • Be at least 18-years-old
  • Have a regular source of recurring income
  • Minimum income requirement of at least $800 per month
  • Have an active checking account the money can be transferred to

If you’re approved for a personal loan, you can receive the funds in as little as 24 hours. Unfortunately, MoneyMutual is not available for New York residents.

3. Bad Credit Loans

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  • Loan Amount
    $500 – $10,000
  • Loan Term
    3 – 60 months
  • Minimum Credit Score
    Flexible
Overview

Bad Credit Loans is another lending marketplace that works with low-income borrowers. They offer personal loans with loan amounts up to $5,000, with an APR range between 5.99% and 35.99%. The loan term is typically 3 to 60 months. There is no minimum credit score.

The application process is easy, and you can receive the funds as soon as the next business day. In addition, Bad Credit Loans lets you compare offers from multiple lenders and see who offers you the best terms.

You must meet the following requirements to qualify for low-income loan from Bad Credit Loan:

  • Be at least 18-years-old
  • You must be a U.S. citizen
  • Have a valid phone number and email address
  • You must have a regular income
  • Have an active checking account in your name

4. PersonalLoans.com

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  • Loan Amount
    $500 – $35,000
  • Loan Term
    3 – 72 months
  • Minimum Credit Score
    580
Overview

PersonalLoans.com is a lending marketplace, and it provides some of the most flexible loan terms available. For example, you can apply for a personal loan between $500 and $35,000, with an APR range between 5.99% and 35.99%.

PersonalLoans.com is available in all 50 states. Low-income loans can be used for any type of expense. You can apply on the company’s website, and you should find out right away whether you’re approved.

To qualify for a low-income loan from PersonalLoan.com, you must meet the following requirements:

  • You must be at least 18-years-old
  • You must have a checking account in your name
  • Provide proof of income
  • You can’t have any recent bankruptcies or charged-off accounts

5. CashAdvance.com

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  • Loan Amount
    $100 – $10,000
  • Loan Term
    Varies
  • Minimum Credit Score
    Flexible
Overview

CashAdvance.com is a loan aggregator that connects low-income borrowers with bad credit to short-term loans. You can receive a low-income loan for up to $1,000 from the company’s network of lenders.

The application process is easy, and if you’re approved, you’ll receive the money as soon as the next business day. However, interest rates are from 200% and 2,290%, so this should be your last resort.

Here are the requirements you’ll need to qualify for a low-income loan through CashAdvance.com:

  • Be at least 18-years-old
  • You must be a U.S. citizen
  • You need a valid phone number and email address
  • Have proof of employment
  • Minimum income requirement of at least $1,000 per month
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How to Compare Low-Income Loans

When searching for the best loan option, comparing multiple offers is essential. This can be particularly difficult when seeking a low-income loan and options appear limited. However, regardless of your financial situation, the core elements to consider remain the same.

Interest Rate and APR

When receiving a quote for a low-income personal loan, you will typically see both the interest rate and the annual percentage rate (APR). The interest rate reflects the basic cost of the loan, while the APR represents the true overall cost, taking into account both the interest rate and loan fees. Find out if the personal loan has a fixed or variable interest rate.

Fees

Carefully consider all fees included in any loan offer. Personal loan lenders charge certain fees that are standard. However, other fees vary depending on whether you’re borrowing from a bank, credit union, or online lender. 

Here are some of the most common fees:

  • Origination fee: A common fee a lender may charge for processing your loan, paid upfront.
  • Prepayment penalty: Lenders will often include a penalty if you pay off your loan before the close of the agreed term.
  • Late-payment fee: If you miss a monthly payment you’ll probably be liable for a late payment fee. These will vary widely from lender to lender, so make sure you’re clear on the fine print even if you’re certain that you can make the loan payments on time.

Loan Term

Many lenders will offer personal loans that come with short, long or flexible terms. A traditional personal loan typically comes with terms ranging from 12 months to 84 months, but certain lenders may offer an extended loan period.

It’s worthwhile deciding on an ideal range for your loan term before shopping for quotes. Remember that a long-term loan can result in lower monthly payments, but on the other hand that will mean paying more in interest over the life of the loan.

How to Apply for a Personal Loan

You will find that regardless of which lender you choose, the application process for personal loans will be similar:

  • Budgeting: The first step is to calculate how much you need to borrow, and factor in monthly payments to your overall budget. Getting clear on your numbers will make finding the best loan for you much easier.
  • Prequalification: You can benefit from prequalification tools with many online lenders, just make sure they don’t conduct a hard inquiry on your credit. Prequalification is the best way to get a clear picture of how much your monthly payment will be and what interest rates are available to you.
  • Compare Offers: Prequalification also allows you to negotiate various offers against each other. Make sure you take the time to responsibly compare all the best offers you’ve found, and be certain about the exact details of your loan terms and conditions.
  • Finalize & Sign: Once you’ve decided on a loan and been approved, you’ll need to sign a loan agreement. Loan funds are usually sent by direct deposit and can be available within five business days.

Can I qualify for a personal loan with low income?

Yes, it’s possible to qualify for a personal loan with low income, but you have to choose wisely. Lenders often view these borrowers as higher risks and offer them higher interest rates and less favorable loan terms.

That’s why it’s a good idea for people with low income to try online lending marketplaces. These loan aggregators specialize in matching individuals with lenders willing to work with their financial situation.

To start, simply fill out an application with the marketplace, providing your basic information and proof of income. The marketplace will then connect you to multiple lenders and allow you to compare and choose the best offer, with the best interest rate and favorable loan terms.

Providing Proof of Income for Low-Income Loans

Some financial institutions are willing to work with low-income individuals. However, you will need to provide proof of income to qualify for low-income loans. Regular monthly income shows the lender you have the cash flow to repay the loan every month. Most lenders want to see that you bring in at least $800 to $1,000 per month.

However, you don’t necessarily need to be employed full-time to find lenders willing to work with you. The only requirement is that you have a consistent source of income, such as Social Security or disability payments.

If you can’t provide proof of your monthly or annual income, you’ll need to consider other alternatives. Applying with a cosigner is a good idea since their income will be considered as well.

If that isn’t an option, you can consider taking out a cash advance on a credit card or refinancing your car or home for extra money. These options aren’t ideal, but they could help you get through this challenging financial season.

Alternatives to Low-Income Loans

Low-income personal loans aren’t your only option for getting the cash you need. A growing number of companies are offering financial services to financially underserved Americans. They offer alternatives to low-income loans that can save you money and improve your credit score.

Co-Signed Loans

Securing a co-signer for your loan can offer numerous benefits, including more favorable loan terms and a lower interest rate. Consider reaching out to a trusted friend or relative with a strong credit score to co-sign on a personal loan with you.

It’s important to note that co-signed loans come with shared financial responsibility, meaning the co-signer will be held accountable if you fail to repay the loan. Before proceeding, check with your lender to determine if co-signing is an option.

Credit Unions

For low-income individuals, local credit unions can provide more advantageous loan terms compared to traditional banks or online lenders. Furthermore, they often have less stringent eligibility criteria. Consider exploring the loan options available at your credit union.

If you are not currently a member, it may be worth joining to take advantage of the benefits they offer. Here’s a list of the best credit unions that anyone can join.

Credit Cards

If you’re seeking short-term financing, a credit card can be a great option, but only if you have a credit history that meets the requirements. However, obtaining a cash advance using your credit card can come with a significant cost.

But, if you’re able to pay off your entire balance before the due date, you might be able to dodge paying any interest. In that case, utilizing a credit card as a source of financing can turn out to be a budget-friendly solution. Just make sure to keep an eye on the terms and conditions before making a decision.

Payday Loans & Auto Title Loans

A payday loan can be tempting when you’re in need of quick cash, but be aware that they often come with sky-high interest rates, making it challenging for people to repay their debt.

When opting for an auto title loan, you put your vehicle on the line as collateral. And if you are unable to repay the loan, you run the risk of losing your car. It is advisable to steer clear of both payday and auto title loans.

Family Loans

Nobody enjoys asking friends or family for a loan. However, if you’re considering something as risky such as a payday loan, borrowing informally from friends or family could be a great option. Ensure that all agreements are in writing, and discuss a repayment plan before borrowing in this way.

Community Assistance

Remember to look to your local community for financial assistance. There could be local resources that you haven’t considered, such as community groups and nonprofits that offer emergency credit or cash advances.

Your employer may also have financial-assistance programs to help you through a rough patch.

How to Spot Loan Scams

There are plenty of safe low-income loan options. However, there are no shortage of predatory loan companies targeting those who are most in need. That’s why it’s important to know how to spot the difference between a legitimate lender and a scam.

No Credit Check

A reputable lender will never guarantee your approval for a loan without checking your credit scores. Most lenders will want to see your credit report, income, and other financial documents before even considering your loan application.

Origination Fees

Many lenders will require things like an approval or origination fee. However, origination fees are typically deducted from the total cost of your loan. If a lender is requesting upfront payment, in any form, they’re unlikely to be trustworthy.

Time Demands

A reputable lender will never pressure you into making a decision, or taking urgent action regarding your loan. Legitimate lenders have no need to push you for time. They will always give you the space you need to make your decision and stick to the agreed repayment terms.

No Physical Address

Never deal with a financial institute or lender that doesn’t have a physical address. Even online lenders will be registered to a searchable business address.

You should find a physical address for any good lender on their website. This is one of the easiest ways to identify an illegitimate lender.

Lender Initiates Contact

Scammers will often use online platforms to market both poor credit and debt consolidation loans. No legitimate lender will make first contact with you regarding a loan.

Personal Loan for Low Income Earners FAQ

How does a personal loan work?

Most personal loans are unsecured, meaning they don’t require collateral. Unsecured loans are paid out in a lump sum, and are repaid in monthly installments for a specified period.

The period during which you make monthly repayments on your loan is known as the loan term. Loan terms usually range from 24 to 72 months.

What is the easiest loan to get approved for?

If you don’t have good credit, the easiest loans to get approved for are payday loans, title loans, and bad credit loans. However, keep in mind that the easier it is to be approved for a loan, the riskier it is to borrow.

Can I get a personal loan without proof of income?

Typically, the easiest way to secure a personal loan without proof of income is to look for a secured loan. Most lenders won’t require you to provide proof of income when applying for a secured loan since the risk is guaranteed by listing collateral.

Can I get a loan even if I’m not working?

Yes. It is possible to secure a personal loan even if you are currently unemployed. Most unsecured personal loans will have minimum income requirements and you’ll need to provide proof of income to qualify. However, your proof of income doesn’t have to be a salary.

Social Security payments, social assistance, and other documented forms of income can also help you qualify for an unsecured personal loan.

See also: Loans for the Unemployed with Bad Credit

What is the lowest credit score you can have to get a personal loan?

Minimum credit scores will vary from lender to lender. So, if your credit score is low you might need to spend some time shopping around first. However, you can use the FDIC credit scoring system to get a good idea of where your credit reputation stands.

For example, a low credit score of 500 could still be enough to qualify for an unsecured personal loan. The catch is, you’ll be limited to working with subprime lenders and much higher interest rates.

What do banks look at to qualify for a personal loan?

When you apply for a loan, lenders will consider several major factors to determine your suitability for borrowing. In addition to your current income, your credit history, credit score, and debt-to-income ratio will all be considered.

If you can improve any of these factors before applying for a loan, you may be able to increase your chances of getting approved even with a low income.

Summary

If you bring in at least $800 in income per month, you could qualify for a personal loan. Apply for a personal loan through a lending marketplace so you can receive loan offers from multiple lenders. Pay close attention to the loan amount, monthly payment, APR, terms, and fees.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.