Trying to make big life decisions when you’re broke is hard. If you are unemployed or under-employed, having a low income can significantly impact your eligibility to qualify for a loan. Unexpected expenses like an expensive car or home repair, a family emergency, or a trip to the emergency room can quickly set you back.
Loan approval depends on a variety of factors, and not solely on your income level. The more critical determinant of whether your application gets approved is your credit score.
As a rule, the higher your credit score is, the better. People with higher credit scores get approved for credit more often and qualify for better interest rates and other terms as a condition of the loan.
There are some responsible lenders that may provide low income earners with a specialized low income loan but qualifying can be a challenge depending on your situation and background.
If your loan application gets declined, you might have to get creative with raising the funds you need.
Get more work – Working more hours is always a first line solution to solving a temporary financial pinch. If you are currently employed part-time, check with your boss or supervisor to find out if you can pick up more hours. If you aren’t working, you’re ready for a change, or you want a second job, the Internet is an excellent ally in your job search efforts. Other places to source job openings include local groups on Social Media Platforms.
Borrow from a friend or a relative – If you always keep your word and pay back the money you borrow, borrowing from a family member or a friend might be the fastest way to finance a short-term cash crunch. Depending on your relationship and the situation, most family members and friends are willing to help if they can, but not all will. Be prepared to accept ‘no’ for an answer graciously.
See if you can get a cosigner – This option is another one that is contingent on someone with an acceptable credit score be willing to put their signature on your loan, therefore ‘backing it’ with their name. If you default on the loan, the cosigner is legally liable for the loan, and their credit takes a hit if the account falls into arrears.
Sell unneeded things – If you have a house full of things that you don’t use, want, or need, there’s nothing more cathartic than selling off these items for some extra cash! Groups on Social Media Platforms are thriving marketplaces for people to sell household items, gently used kids clothing, cars, houses, and even services.
If you aren’t into Social Media, check for resale shops in your area. Depending on the type of resale shop you go to they may buy books, CD’s, DVD’s, used or new electronics, games, game consoles, audiovisual equipment, sports equipment, and clothes. If your items are accepted, these types of shops make an offer for cash or store credit. If you agree to the offer, they either pay you in cash or give you a store credit. You can decide which option works best for you.
We hope these tips from Low Income Financial Help are useful for you in meeting your financing goals.