Is it difficult to get a loan despite small income?

Each bank links lending to certain conditions. This also includes a regular income, which should be at least high enough to ensure that the monthly loan installments are paid. Otherwise, lending becomes very difficult.

Compare loan offers

Compare loan offers

Before taking out a loan, every bank customer should be aware of what loan amount they need and how high the monthly repayment rate can be. If you only have a small income, you will hardly be able to get a loan with a total amount in the six-digit euro range. A small loan in the amount of 1,000 to 5,000 dollars can, however, be realized. An essential requirement for this is that the Credit Bureau information is in order.

A loan despite a small income can not only be taken out at the house bank, but at almost every German bank. Many direct banks that do not have an extensive branch network have particularly favorable conditions for a small loan. A comparison on the Internet can provide more detailed information, which can be carried out at any time of the day or night and is constantly updated.

Loan collateral

Loan collateral

If the income is significantly below the garnishment exemption limit, the bank cannot accept it as the sole loan security. This problem will mainly affect low-wage earners or part-time employees, but also full-time employees from certain professional groups who earn very little income. The number of people who are unable to make a living from their work despite full-time employment and who have to receive supplementary social benefits has increased significantly in recent years.

If you have a well-earning spouse, you could use him as a guarantor or as a co-applicant for the loan despite a small income. However, this person should be aware that they will have to pay for the loan installments if the actual borrower is no longer able to do so. Other collateral that the bank is happy to accept is life insurance, a custody account, a debt-free property, or larger cash assets.

Application and approval

Application and approval

A loan despite a small income can be applied for either in a bank branch or on the Internet. The first-mentioned variant has the great advantage that the bank advisor can contact the customer immediately with personal questions. An online application is possible around the clock and is not tied to certain bank opening times. If there is no direct contact between the bank advisor and the customer, the credit documents must be sent using the PostIdent procedure.

To do this, the customer must go to a post office counter and present his ID there. If the identity is clearly established, the credit documents are forwarded to the bank. Now you can decide on the loan application. If all the requirements for a loan are met, the loan can be paid out within a few hours despite a small income.

Net loan amount | Learn more in the guide

When making larger purchases, such as buying a house or building a home, one thing is particularly important: If you need financing, you need to know exactly what the bank is actually paying into your own account. This actual loan amount is the net loan amount. With it, borrowers can better plan their financial needs in the long term. It also indirectly shows what credit really costs and how far the loan has been repaid. In the guide we show how the net payment amount can be better used in practice.

What is the net loan amount?

What is the net loan amount?

The net loan amount is the amount paid out by the bank to the borrower after the contract has been concluded. As a rule, this is the financing requirement required by the bank customer for his investment. In most cases, the requested loan amount (gross loan amount) does not differ significantly from the net loan amount.

However, some banks charge processing fees. In addition, costs for residual debt insurance can arise. These amounts will not be invoiced separately, but will be offset against the amount paid out. Then the net loan amount is actually slightly less than the gross loan amount. In general, however, the net loan amount is fixed in the loan agreement and the amount is specified there. It is therefore advisable to choose the net loan amount as the personal financing needs actually are. The loan specialists at Across Lender are happy to help you find the optimal loan with the right terms.

What is the net loan amount used for?

What is the net loan amount used for?

The net loan amount is also important for calculating the interest, repayment plans and conditions of a loan. Because its height is the decisive factor. In this way, the agreed debit interest is separated from the net loan amount or determined as part of the loan rate. Other costs are also calculated on this basis. The net loan amount is also an important figure at the end of the loan term: __This is only considered to be repaid when the customer has paid back the full amount of the loan. __

The key figure therefore gives every borrower practical and useful information that they can count on. This makes it much easier for him to assess the current and actual total debt to a bank. It is also important information if the borrower is planning several other investments at the same time: for example, in addition to building a house, larger private purchases. With the net loan amount, he can better understand his financial capacities. On the other hand, banks prefer to use it to better assess the financial situation of the borrower.

Net loan amount and gross loan amount: what’s the difference?

If the cost of the loan is fully added to the net loan amount, this gives the gross loan amount. The costs include possible additional costs as well as the interest. Often there are additional processing fees or a required residual debt insurance. Both sizes can be easily calculated:

  • Gross loan amount minus cost of loan = net loan amount
  • Credit Cost = Gross Loan Amount Less Net Loan Amount

This rule of thumb also results from the difference between the two amounts: the smaller the difference, the cheaper the loan.

The net loan amount therefore has the following characteristics:

  • what amount of money borrowers have actually applied for
  • from the credit it is the actual amount paid out to the customer’s account
  • it is more suitable for planning your own finances
  • the net loan amount can be used to compare offers

The gross loan amount therefore has the following characteristics:

  • it is the total amount of the loan
  • it indicates how much money the borrower has to repay in total
  • it contains the additional costs and interest of the loan
  • the gross loan amount can be used to compare offers.

Calculate loans correctly with the net loan amount

Calculate loans correctly with the net loan amount

Loan offers often speak of the total amount. However, this is not the amount that the borrower can dispose of. A calculation example for the installment loans that are used very often in everyday life shows it:

Sample calculation for an installment loan:

In fact, the customer receives only 40,000 dollars from the total loan amount of 44,600 dollars.

Tip: If you want to get a quick overview of the current conditions for an installment loan, you can start a free and anonymous comparison at Across Lender. The offers in the results list always contain information on the total amount of the loan. In this way, the appropriate offer can be determined based on the selected conditions.

Credit despite mortgage – How can it be done?

If you want to finance a house or want to buy a car, you will quickly think about a loan, since it is larger purchases. Not everyone has several thousand dollars in their accounts to pay for everything.

Loans allow some people to get luxury items that are then repaid in installments. However, if you already have a mortgage, you will not be able to get a loan so quickly.

What can be done

What can be done

A mortgage is a form of loan. This mortgage is taken on the property or property. Anyone who wants to have another loan approved must have collateral. While the mortgage is tied to an object, a normal loan is responsible for different purchases. Even if a house is sold, a mortgage still has to be paid off and this often takes many years. Nevertheless, a loan can be taken out despite a mortgage.

If you have set your mortgage with low installments, so that the monthly charge is very low, you can also pay off the installments of another loan. This requires a high income. However, if this income is insufficient, the borrower will have to try to offer other collateral to the bank. For example, the spouse can act as a guarantor with their salary. Others may have endowment life insurance that can be used as collateral.

Advantages of a loan despite a mortgage

Advantages of a loan despite a mortgage

Anyone who can pay off the mortgage and another loan installments does not have to forego wishes in everyday life. Depending on the creditworthiness, further purchases can be made that will not bring you into financial difficulties. The loan despite the mortgage should, however, be chosen well, because credit is not the same as credit. The providers are represented in large numbers, so that a comparison is always worthwhile. In addition, only so much should be included that it is enough for one purchase. A credit always means debts and they always have to be paid.