Which Bank Gives Loans for Low Salary?

Many people seek Personal Loans to cover their planned or unplanned expenses. However, their monthly salary is a primary factor affecting loan eligibility. Most lending institutions have a minimum salary requirement. You must earn a minimum monthly salary to qualify for their loan. 

If you have a low income, you must look for a loan provider offering loans with a low salary requirement. For instance, Hero FinCorp has a minimum salary requirement of just Rs 15,000. Read on to find out more about these loans.

Read Also: How Much Personal Loan Can You Get on 18000 Salary?

Importance of Salary for Loan Eligibility

Understanding the significance of salary for loan eligibility is essential. Since Personal Loans are unsecured, lending institutions depend on your monthly income to ensure timely repayment. A decent income indicates enough financial capacity to repay the EMIs on time. On the other hand, a low income restricts your repayment capacity, increasing the lender’s risk. Checking your monthly salary proves income stability. Based on that, the lenders determine your loan amount, repayment tenure, and interest rate.

Significance of Maintaining a Low Debt-to-Income (DTI) Ratio

Besides your income, lending institutions check your DTI ratio to evaluate your repayment capacity. Despite a low income, you may easily afford the EMIs if you have no other financial obligations. However, you may face a financial crunch if you have a good income but a high DTI ratio. Most loan providers prefer applicants with a DTI ratio of 30-40%. 

Read Also: Can I Get A Personal Loan If Salary Is Less Than 15000?

Other Factors Affecting Your Loan Eligibility

Apart from your monthly income, several other factors determine your loan eligibility. They include the following:

• Age: You should be in your prime earning years to ensure sufficient cash flow. Ideally, you should be within the age bracket of 21 to 58 years to qualify for a Personal Loan.

• Work Experience: To obtain a Personal Loan, you should be working in the same company for at least six months as a salaried employee. It ensures job stability and income regularity. The minimum work experience requirement is two years for self-employed professionals.

• Credit Rating: If you apply for a loan with a low salary, the loan provider will expect a high credit score to determine your creditworthiness. Maintain a decent credit score to improve your chances of getting a Personal Loan with a low salary.

Read Also: How to get Personal Loan with Low Income online?

Things to Consider When Taking a Low Salary Loan

Here are a few things to consider when taking a loan with a low salary:

• Eligibility Criteria: Checking the personal loan eligibility criteria of the lender becomes more important when seeking a loan with a low income. It reduces your chances of getting the loan rejected.

• Interest Rate: The personal loan interest rate significantly impacts the total loan cost and EMIs. A high interest rate leads to an expensive loan plan. If you apply for a loan with a low salary, you may get approval but at a higher interest rate. Therefore, check the interest rates before finalising.

• Additional Charges: When calculating the total loan cost, take other charges into consideration. They may be higher if you seek a loan with a low salary.

• Calculate the EMIs: When you borrow a loan, you must repay it within a specific time frame in EMIs. The longer you take to repay the loan, the higher will be the loan cost. However, distributing the loan cost through a longer tenure decreases the EMI amount. Since you have a low salary, a longer tenure with smaller EMIs can be more suitable for you. Use an online personal loan EMI calculator to calculate the EMIs and choose a repayment tenure with budget-friendly repayments.

• Check Your Financial Obligations: If your salary is low, ensure you can adjust the loan EMIs in your monthly budget. Evaluate your fixed monthly obligations and see if you have enough disposable income to repay the new EMIs. Calculate your EMIs and ensure your DTI ratio does not exceed 40%.

If you are looking for a Personal Loan with a low salary, you can apply online with a minimum salary of Rs 15,000 at Hero FinCorp. Fulfil other eligibility conditions to avoid rejection due to trivial reasons like age and work experience. Borrow a low amount and distribute the EMIs over a longer term to ease repayment. 

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.