Best Personal Loans for Low Income of March 2024

ElitePersonalFinance
Last Update: September 25, 2023 Loan Reviews Loans

People with low incomes have to be careful with loans. If you have a low income, there is a risk of not paying the loan on time, leading to problems like late fees, bankruptcy, marks on your credit file that will stay there for up to 10 years, and other problems.

The best loans for people with a low income are personal loans. These loans have an APR of up to 35.99% and offer up to $100,000. If you have a low income, stay away from payday loans and auto title loans. They are predatory. These lenders typically promote them like: “no credit ‒ no problem,” “bad financial situation ‒ no problem.” They target people with a low income, but this is exactly what you have to avoid. Payday loans come with an APR of about 400% and risk getting into a debt cycle. Watch the video to see how people with bad credit can get a personal loan.


People with low incomes have a high risk of falling into a debt cycle. This means that if you don’t pay the amount on time, you will be required to pay only its interest on the next payday, which is about $30 for every $100 per month. However, this won’t lower the principal amount, and the process will continue until you find the money to pay the amount in full.

Here is a list of the best personal loan companies that can help people with a low income.

Best Personal Loans for Low Income of March 2024

Upgrade

Loan Amount:$1,000 – $50,000
APR:8.49% – 35.99%
Min. Credit Score:560
Approval:1 Day
Terms:2 – 7 Years
Fees:
  • Loan origination fee of 1.85% – 9.99%
  • Late payment fee of $10, after a 15-day grace period
  • Insufficient funds fee of $10
  • There are no prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 560
  • Have a DTI ratio that doesn’t exceed 75%
  • Have recurring employment income or government benefits
  • Fill out your information through Upgrade’s online portal
Average Borrower Profile:
  • Has a credit score of 678
  • Has an annual income of $78,000
Best For:High DTI ratios
Check rates

Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49% – 35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. The lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36 – month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower, and your loan offers may not have multiple term lengths available. The actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed-rate loan. There is no fee or penalty for repaying a loan early.

Upgrade is a great company because they offer help to people who have lost their jobs. But unfortunately, they can’t help you if you have a really bad credit score and are in a bad financial situation. They have two requirements: a 560 minimum credit score and at least $1,000 of free cash flow after monthly expenses. However, if you meet these criteria, you definitely have to check what they have to offer.

Upstart

Loan Amount:$1,000 – $50,000
APR:4.6% – 35.99%
Min. Credit Score:300
Approval:1 – 7 Days
Terms:3 – 5 Years
Fees:
  • Loan origination fee of 0% – 12%
  • Late payment fee of 5% of the amount due, or $15, whichever is greater, after a 15-day grace period
  • Insufficient funds fee of $15
  • Paper documents fee of $10
  • There are no prepayment fees
Qualification Criteria:
  • Minimum age: 18
  • Residing in the United States (don’t have to be a citizen or permanent resident) (exception for military)
  • Minimum credit score of 300 in most states
  • No bankruptcies or public records on your credit report
  • No accounts that are currently in collections or delinquent
  • Living in the 50 US states
Average Borrower Profile:
  • Borrows roughly $8,600.
  • Incurs an APR of 23.98% on a five-year term
  • Achieves approval nearly twice as often than traditional lenders with a FICO Score of 620 to 660
  • The CFPB found Upstart’s AI risk model approves 27% more borrowers and they incur APRs 16% lower than traditional lenders
Best For:Low credit scores, high DTI ratios
Check rates

Terms: Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).

Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

The full range of available rates varies by state. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.44% and a 8.64% origination fee of $864, for an APR of 22.88%. In this example, the borrower will receive $9136 and will make 60 monthly payments of $257. APR is calculated based on 5-year rates offered in March 2023.  Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

While most loans through Upstart are unsecured, certain lenders may place a lien on other accounts you hold with the same institution. It is important to review your promissory note for these details before accepting your loan.

When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information may be reported to the credit bureaus.

The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical credit-score only model used in Upstart’s analysis was developed in connection with the CFPB No Action Letter access-to-credit testing program and was built from a traditional credit score only model trained on Upstart platform data. APR for the scorecard was averaged for each given traditional credit score grouping.

While automated recurring payments are easy to set up, payments by check or one time electronic payments can also be used to repay a loan. Borrowers have the flexibility to choose the repayment method that works best for them.

This information is based on actual borrowers as of 4/1/2023 who identified “credit card refinancing” as their primary use of funds and paid off at least 51% of their outstanding credit card debt within 3 months of taking out the loan. Out of these actual borrowers, some could have experienced an increase or decrease in their credit score. This information reflects the overall average change in credit score points experienced by this group of borrowers as identified above.

The majority of borrowers on the Upstart marketplace are able to receive an instant decision upon submitting a completed application, without providing additional supporting documents, however final approval is conditioned upon passing the hard credit inquiry. Loan processing may be subject to longer wait times if additional documentation is required for review.

PersonalLoans

PersonalLoans is a company that can be very helpful. They have a clear credit score and loan income requirements on their site. A credit score of 580 and an income of at least $1,000 a month are enough for you to get a loan.

Loan Amount:$1,000 – $35,000
APR:5.99% – 35.99%
Min. Credit Score:580
Approval:1 Day
Terms:90 days – 72 months
Origination Fee:1 – 5%
DTI Ratio:N/A
CHECK RATES

What Valuable Tips Can We Give to People with Low Income?

People with a low income are a great target for loan sharks because a day may come when they will not make a loan payment. That is why we recommend that you carefully check loan flexibility factors. These are things like late fee penalties, refinancing options, and so on. Carefully discuss what will happen if you don’t make a payment with your lender. Some companies offer great options like skipping a payment, which you can easily do online with a single click of a button, with no late fees applied. On the other hand, some companies don’t offer flexible loan options, and we recommend that you skip them. Nothing is free! Flexibility can lead to a slightly higher APR, but the choice of APR vs. flexibility is yours.

Make sure that you read the contract carefully and that you can pay the loan on time. If not, you risk being in a debt cycle. There will be problems with personal loans, but not nearly as serious as with payday loans.

Work on your credit score and improve your overall financial situation. There are many things that you can do to improve your financial situation. Below we will list a few great ways to make and save money online.

We have listed a few companies that can help people with a low income to get a loan. However, the best way is to shop around. Apply for many companies and compare offers.

Try to avoid getting a loan.

We have a list of tips that will help you avoid taking out a loan.

https://www.elitepersonalfinance.com/how-you-can-avoid-payday-loans/

Conclusion

Getting a loan with a low income is possible, but we recommend trying other options. Carefully discuss all refinance options and make sure that you can pay everything on time. We recommend that you get a loan only as your final resort because there is a risk that you won’t be able to pay it off. At all costs, avoid payday loans and auto title loans.

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