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Key takeaways
- You’re more likely to secure a personal loan despite a low income if you apply for a smaller loan amount, apply with a cosigner or work with an online lender.
- Be wary of credit card-like interest rates, even from reputable lenders, if you don’t have good credit.
- Check your budget and ensure you can afford your monthly payment because defaulting can damage your credit score.
- If you don’t qualify for a personal loan, alternatives include secured loans and credit cards.
If you have a low income and face an unexpected expense, a personal loan may seem completely out of the question. Most lenders require applicants to have a stable income, and some even set a minimum income requirement. But there may still be ways you can qualify, including by getting a co-applicant.
Before applying, ensure the monthly payment won’t stretch your budget too thin. Consider the interest rate, repayment term and applicable fees when calculating your total monthly payment. Falling behind on your payments will leave you with credit score damage and growing debt.
Low-income personal loan lenders
| Lender | APR range | Loan amounts | Annual income requirement | Minimum credit score |
| Happy Money | 7.95%-29.99% | $5,000–$50,000 | None | 640 |
| Prosper | 8.99%-35.99% | $2,000–$50,000 | Greater than $0 | 600 |
| Universal Credit | 11.69%-35.99% | $1,000-$50,000 | None | 580 |
| Upgrade | 7.74%-35.99% | $1,000–$50,000 | None | 580 |
| Upstart | 6.50%-35.99% | $1,000–$75,000 | $12,000 | No requirement |
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Happy Money offers one loan — the Payoff loan. It’s designed to consolidate high-interest credit card debt. The starting APR is much lower than the average credit card rate, which is above 20 percent. Happy Money has no minimum income requirement, though you’ll need enough regular income to cover your monthly payment. This lender also offers online money management tools and financial education resources to help you take control of your finances.
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Pros
- No minimum income requirement
- Direct payment to creditors
- No late fees
Cons
- Origination fee of up to 10%
- No cosigners or co-borrowers
- High minimum loan amount
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Prosper is a peer-to-peer lender, meaning that loans are funded by individual investors rather than a direct lender. You may qualify with any income over $0, as long as it supports the payments. Prosper also supports co-borrowers, making it easier to qualify.
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Pros
- Joint applications
- Low minimum income requirement
- Lower minimum APR
Cons
- Origination fee of up to 9.99%
- High maximum APR
- Potentially slow approval process
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Universal Credit has no income requirement and a lower minimum credit score than competitors at 580, but its APRs are higher, too. They stand out for offering small loan amounts, starting as low as $1,000. However, Universal Credit only offers two repayment term options: three or five years.
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Pros
- Low credit score minimum
- No income requirement
- Next-day funding
Cons
- High APRs
- Limited repayment terms
- Potentially high origination fees
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Like some of the other lenders on this list, Upgrade doesn’t have a minimum income requirement, though you must earn enough to support the repayment of a new loan. If you’re borrowing to consolidate debt, Upgrade also offers direct payments to creditors (with a small rate discount). And if you don’t qualify for an Upgrade loan, you can apply with a co-borrower or secure your loan with a vehicle to improve your eligibility.
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Pros
- No minimum income requirement
- Direct payment to creditors
- Joint loans available
Cons
- Potentially high origination fee
- High maximum APR
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Upstart has a low annual minimum income requirement of just $12,000. This lender also works with borrowers across the credit spectrum. If you have great credit, you may qualify for one of the lowest rates on the market. If you’ve had some credit challenges, you may qualify for a loan with a score as low as 300 — or even if you don’t have enough credit history to generate a score. However, rates can be high for less-qualified borrowers, and this lender charges the largest origination fee we’ve found: up to 12 percent.
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Pros
- Low minimum APR
- Accessible eligibility metrics
- Fast funding
Cons
- Potentially high origination fee
- Few term options
- High maximum APR
Bankrate insight
If a lender doesn’t disclose its annual income requirements, ask whether it offers prequalification. When you prequalify for a personal loan, the lender performs a soft credit check to determine whether you qualify and allows you to preview potential rates.
How to get a low-income personal loan
Lenders want reassurance that you earn enough income to make timely loan payments. While not all lenders have a minimum income requirement, they all have other approval criteria you must meet to get a personal loan. For example, you may need to provide proof of income or show you have no recent defaults or bankruptcies.
- Survey various lenders — including banks, credit unions and online companies — to learn about eligibility and your potential rates and terms.
- Plug your loan amount and possible APR (annual percentage rate) into a personal loan calculator to estimate your potential monthly and overall repayment.
- Create or optimize your budget, perhaps by trimming unnecessary expenses, to ensure you can realistically afford your potential loan repayment.
- Check your credit report and start monitoring your credit scores, as strong credit can help you make up for a lower income.
- Consider the possibility of a personal loan cosigner, or delay your loan application, as possible, to continue fine-tuning your budget and improving your credit.
- Take your stronger application to market, starting by prequalifying with lenders that offer you the ability to confirm eligibility and check rates without submitting to a hard credit check.
- Check in with other reputable financial institutions, including your nearby banks and credit unions, to see if they can beat rates and terms you’ve found elsewhere.
- Submit a formal application with your preferred lender, supplying documentation like your proof of income.
Other minimum requirements to consider
- Credit score: The average personal loan rate is currently above 12 percent, but bad-credit borrowers may receive a rate as high as 36 percent.
- Income: Lenders may ask you to provide recent pay stubs, W-2s or tax returns, along with your employer’s contact information. If you’re not a W-2 employee but earn income from self-employment, side hustles, child support, alimony or government benefits, list these on your loan application.
- Debt-to-income (DTI) ratio: Lenders prefer a debt-to-income ratio (DTI) at or below 36%, though some lenders will accept DTIs up to 50%.
- Proof of residence: The lender may request a copy of a mortgage statement, lease agreement or a utility bill that includes the name and physical address listed on the loan application.
Bankrate’s take:
If you don’t meet the eligibility criteria and don’t need immediate funding, consider working with a credit counselor or creating a debt management plan to help you pay down existing debt and improve your credit.
Alternatives to a personal loan
If you’re unable to qualify for a personal loan or would simply prefer to explore other funding sources, consider the following options.
Credit cards
If you have good or excellent credit, consider a credit card with an interest-free introductory period. Paying off the entire balance before the promotional period ends means you won’t pay any interest on charges you incur. If you carry a balance from month to month, however, this form of financing could be costly. Interest will accrue, and your balance can grow quickly.
“Good to excellent credit might get you approved, but lower income often means a smaller credit limit. Usually, these 0 APR offers last anywhere from 12 to 21 or more months, which gives you time to pay off the balance from a large expense or debt consolidation,” says Seychelle Thomas, a former Bankrate writer and Certified Financial Education Instructor.
“Before choosing this form of financing, it’s important to have a plan to pay it off before the introductory period ends and the regular APR kicks in. Otherwise, any remaining balance will start accruing interest — and usually at a higher rate than a personal loan,” Thomas advises.
Secured loans
You must put up collateral to get a secured loan, commonly a vehicle or savings account balance. However, secured loans are attractive to many borrowers because you can get approved with a lower credit score and minimal income, and you may receive a substantially lower rate than you’d get on unsecured debt. The downside is that you could lose your asset if you default on the loan.
Payday alternative loans
Some federal credit unions offer small-dollar emergency loans to their members. These low-income loans are often referred to as payday alternative loans. These loans can be up to $2,000 with a maximum APR of 28 percent — that’s significantly more affordable than the 400 percent APR that you’ll find with payday loans. However, you must be a credit union member to borrow this type of loan, and not all credit unions offer them.
Short-term loans
Financing with faster repayment periods can be accessible if you have a low income, but also dangerous to borrow. After all, you have less time to overcome a potential hiccup with your finances. That’s partly why pawnshop and payday loans — plus title loans that serve up your car as collateral — should be considered a last resort.
| Product | How it works | Fine print |
| Pawnshop loan | The shop lends you as little as 25% to 60% of your valuable item’s value in cash — and only returns it after you repay the loan plus fees in full, typically within 30 to 60 days. | If you fail to repay the debt, the pawnshop will sell your item to recoup its losses. Pawnshop fees often translate to APRs in the triple digits. |
| Payday loan | As the name suggests, the balance is generally due by your next payday, commonly within two weeks. | Some APRs go as high as 650 percent, far higher than even pawnshop loans charge. |
Bottom line
Taking out a personal loan is sometimes necessary, but having a low income can make it challenging to manage. The upside is that some lenders offer flexible, affordable loan products with competitive rates for those with a lower income.
Before you apply, make sure you can afford the monthly payments. Explore well-regulated options like personal loans and credit cards before turning to riskier, higher-interest alternatives.
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