A personal loan is a unique financial product that can be described as one solution for multiple problems. Whether facing a medical emergency or planning a vacation aboard, it can meet all your planned and unplanned expenses. The approval of this loan depends on multiple factors, and your income is one of the biggest ones.
So, a general question here is whether it is possible to get a personal loan salary less than 20000.
Well, it is possible to do that, but there are specific requirements, which, if you can ascertain, the chances of getting a personal loan with a low salary becomes very high.
Six ways to get a personal loan online with a salary less than 20,000
Here are the ways to get a personal loan with a monthly income of less than Rs.20,000:
Boasting a high credit score
The first way to secure a personal loan, even with a low income, is to maintain a high credit score. Since this three-digit number signifies your creditworthiness, lenders emphasise it while approving an application.
Lenders generally prefer borrowers with a good credit score, around 750 or above. You can easily convince the financial institution to approve your loan application if you have such a high score.
Having the repayment capacity
Your capacity to repay the loan taken also plays a major role in getting your loan approved. Your repayment capability is measured on your job profile. It indicates income stability if you work under a PSU or any MNCs or have a business with a steady turnover. A stable source of income indicates lesser chances of defaulting and bolsters your chances.
Furthermore, if you have additional income sources like house rentals, farming, investments, etc., mentioning them in your application is always better. This way, the total amount may surpass your primary income of Rs.20000, which will only enhance your chances of getting a personal loan.
Meeting the eligibility parameters and submitting the proper documents
Apart from the credit score, every lender has specific criteria that a borrower must satisfy to get the desired credit. Moreover, these eligibility criteria do not rely on your income status, so it is helpful if you take care of them first.
A personal loan generally requires little documentation, and lenders usually specify their needs. So, it is better to keep track of them and be prepared with all that is requested.
Also, always put the correct information in the loan application form. The details should match your documents. It will increase your reliability as a borrower to the lender and improve your chances of getting a loan.
Apply for a personal loan jointly
In case you can, applying for a joint personal loan is an excellent option. For joint borrowing, both your and your partner’s credit profile will be thoroughly checked, along with the debt history, repayment ability, current EMIs, income status, and employment type will be considered. Therefore, applying as a co-borrower can enhance the possibility of getting a personal loan even with a low salary.
Ask for the right amount
It is always a wise decision to maintain your financial health. So, ask for the amount you can pay back in due time while managing other financial commitments. In this regard, you can take the help of an online personal loan calculator. Once you enter all the loan details, it will show the EMIs.
Based on this, you can see whether you can manage the instalment of your desired amount or if you need to lower the asking amount. Based on this, you can apply for a loan that improves your chances of getting approval.
Apply with the financial institute you already are associated with
When you apply to the financial institute you are already connected to or working with, the chance of getting a loan application approved increases. They would have all your information before your application. Besides, there is already a trust factor between you and the lender. So, you will need to submit only the extra documents they require, reducing the overall processing time for the loan.
Even with a salary as low as Rs.20000, getting a personal loan is easy when you understand the terms and conditions. Hopefully, now you know the aspects you need to manage to get the loan amount you want without hassle.
Frequently Asked Questions
Q1: Can I qualify for a personal loan with a salary below $20,000?
Yes, you can still qualify for a personal loan with a salary below $20,000. Lenders consider various factors, including your credit score, employment history, and debt-to-income ratio.
Q2: What is the minimum salary requirement for most personal loans?
While the specific minimum salary requirement varies among lenders, many consider applicants with salaries below $20,000. It’s essential to research different lenders and their eligibility criteria.
Q3: How does my credit score impact my chances of getting a personal loan?
Your credit score is a significant factor. While a lower salary might be a consideration, a higher credit score improves your chances of approval. Maintaining a good credit history can compensate for a lower income.
Q4: Are there specific types of personal loans for individuals with lower incomes?
Yes, some lenders specialize in offering personal loans for individuals with lower incomes. Exploring options like secured loans or loans with co-signers may also enhance your chances of approval.
Q5: Can I use collateral to secure a personal loan with a lower income?
Yes, using collateral, such as a vehicle or savings account, can increase your chances of securing a personal loan. This provides lenders with additional assurance and may lead to more favorable terms.
Q6: What steps can I take to improve my chances of loan approval?
To enhance your chances of approval, consider improving your credit score, reducing existing debts, and exploring co-signer options. Additionally, researching lenders that specialize in working with individuals with lower incomes can be beneficial.