Table of Content:
Get a Personal Loan Based on Your Income
How to apply for loans based on your income only?
How Much Income Do You Need to Get a Personal Loan?
Why Does a Lender Need Proof of Income?
Are Income-Based Personal Loans suitable for Bad Credit?
Do income-based loans require a credit check?
How much of a loan can you get with high income but bad credit?
What is considered high income?
Get a Personal Loan Based on Your Income
Are you looking for a personal loan but have limited or bad credit? If so, you may be able to get an income-based personal loan. These loans are designed specifically for borrowers who have a hard time qualifying for traditional loans. They are also a great option if you need fast cash and don’t want to use a credit card. Income-based personal loans can help you cover unexpected expenses, consolidate debt, or make a large purchase. Read on to learn more about how they work and where to find them.
What are Income-Based Loans?
The main reason that an income-based loan could be a good option for you is that it will depend on the amount of money available and your credit history. Not everyone has access to quick cash or great credits, which means this type of financial product might just work out well if they're looking at extending personal loans for bad credit borrowers!
An income-based personal loan is an investment in your future. This type of financing will help you to buy a house or start-up business with the money it brings, but they can come at higher interest rates due to their riskiness since many people have poor credit histories like yourself!
Still, income-based loans are a great option if looking for fast cash without having bad marks on your credit history profile.
How income-based loans work
Lenders will ask different questions to determine if you’re eligible for an income-based loan. Some may perform a soft credit check, while others won't pull your history at all! Watch out because these types of lenders often offer loans without any type of inquiry into the applicant's ability to pay back what they've borrowed; make sure it is something that interests and suits YOUR needs before accepting this kind of offer as well!
How to apply for loans based on your income only?
If you find yourself in need of money and don’t want to take on the burden alone, and income-based loan may be just what your financial situation needs.
The pre-qualifying process is an easy way to find the best lender for you.
- You can fill out a form on their website and see if they offer any loans in your area with low rates of interest or no credit requirements!
- The next step would be comparing terms so that when it comes down to two offers, one will appear more beneficial than another based on your preferences.
- When you’ve applied and been approved, it can take anywhere between 10 minutes and two weeks to receive funding. You will have about 1-2 days after approval before your money is sent out!
These types of loans consider your monthly income when deciding whether lenders will approve your loan application or not. Lending companies typically pay more attention to your earnings than your credit score.
What to consider
As soon as you’ve made sure you qualify for such a loan, i.e. you have enough income, it’s time to start an online application:
- Income verification: You might be asked to provide documentation of your income so lenders can see how much money you earn.
- Loan amount: The higher the loan amount, generally speaking—and this is true for loans no matter what type they are--the more interest there will likely be charged over time because it takes longer than lower-interest credit cards or other short term financing options before any funds from servicing departures as well let alone principal repayment make their way back into our bank account!
- Loan Term: Six months? A year?) There are many different types of personal loans, but how much you pay in interest will depend on the term.
- APR: A longer loan means higher monthly payments and potentially saving money by going for a shorter repayment period with an attractive APR or even more expensive fees that come along side your borrowed funds!
- Bank account details: The lender may also want to look at your bank account before approving the loan.
- Restrictions: The restriction is that you cannot get this from any company other than yourself or a financial institution; if they ask for verification, then provide documentation such as signed copies of checks written out in order with balance information included on top (date).
How Much Income Do You Need to Get a Personal Loan?
If you're looking for a personal loan, your annual income needs to be at least $15-20K. If requesting 100k then it should cover about 10 times that amount - in other words, an average salary of around 150 thousand dollars per year or higher if seeking loans up hundreds of thousands.
You should keep in mind, that there isn't a set income requirement for getting a personal loan. However, the average markers in this article illustrate that lenders look at more than just your salary when deciding whether or not to approve you as an applicant and what interest rates they'll give out based on their own criteria (such as credit score, for example).
National Median Income
Americans can apply for loans based on their income, as the National median income has been on a steady increase within the past five years as you can see in the table:
|
Year |
National Median Income |
Percent Increase |
|
2015 |
$68,260 |
3.57% |
|
2016 |
$71,062 |
4.10% |
|
2017 |
$73,891 |
3.98% |
|
2018 |
$76,401 |
3.40% |
|
2019 |
$80,944 |
5.95% |
Why Does a Lender Need Proof of Income?
Showing pay stubs is a great way to authenticate your identity. It also confirms that you're an employee, not just a self-employed or independent contractor. It also lets lenders get verification of your current financial state and determine how much income you need to be approved!
If you're in the self-employed or independent contractor industry, then a lender will want to see proof that your income is coming from an active source. They may also ask for other financial documents such as bank statements and tax returns during their review process - so make sure they have all this important information before applying for income-based loans.
Are Income-Based Personal Loans suitable for Bad Credit?
When you are in a position where it is hard to qualify for loans, high income can help. This is especially true if your credit history has been marred by years of financial trouble or risky behavior like late payments on accounts and missed debts altogether!
A lender will more likely accept an application from someone who has paid their bills than one with little experience paying anything at all. In this case, your income may be used to make up for your bad credit history. You get more chances of getting a personal loan if you can provide proof of sufficient salary.
Do income-based loans require a credit check?
Income-based loans allow people with less fortunate backgrounds to get the personal loan they deserve. They provide financing for those who might not otherwise be able to get a loan from a bank or other source.
Lenders offering loans on the basis of your income do only a soft credit check as they don’t regard your score as the main approval criterion.
How much of a loan can you get with high income but bad credit?
If you have a low credit score and need money, there are lenders who will lend up to $35000. However if your personal loan application is approved with a high income but bad score, the amount granted may be less than what's available for those with better credit.
What is considered high income?
As you can see, there's no one size fits all when it comes to how much money someone makes. This means that if your household has multiple people living in them and/or their location varies greatly by season (for example farming), then they may not be considered high earners enough for some lenders!
For high earners, a three-person family needed an income between $106,827 and $373,894 to be considered upper-middle-class, Rose says.
Use income-based loans to build your credit!
A personal loan can be helpful in improving your credit if you're responsible for it. If that means building up a healthy payment history and keeping current on all of the payments, then by borrowing responsibly now they'll have time to grow into something bigger than just teensy loans later down this financial road!
A few tips for using an income-based product wisely:
Making your payments on time is one of the most important factors that affect credit scores.
- Check with lenders to see if they report this information and how often it's reported, as being aware can help keep you from falling behind in other areas!
- The idea of adding another form to your credit reports might seem like the kiss of death, but it can actually help you maintain or even improve certain aspects in regard to how much debtors are owed.
- Try different loan types. It will reflect positively on your FICO score.
An income-based loan is a type of credit that evaluates your ability to repay based on your monthly income, not just your credit score. This means if you have a high salary but an average or poor credit, this may be the right option for you. If interested in applying for one of these loans online with no hassle, call us today! Our experts are available 24/7 and would love to help walk through all our terms so there are no surprises when it’s time to sign off on an agreement. Be sure to look into all the terms before choosing a lender and applying online.
You are about to post a question on compacom.com:
Any comments or reviews made on this website are only individual opinions of the readers and followers of the website. The website and its authors team are not responsible, nor will be held liable, for anything anyone says or writes in the comments. Further, the author is not liable for its’ readers’ statements nor the laws which they may break in the USA or their state through their comments’ content, implication, and intent.