How much do I have to earn to get a non-bank loan?
September 27, 2019
Earnings are a key component of the indicator, which is creditworthiness. Not knowing the exact algorithm for calculating this parameter (even the bank employees with whom we sign the contract do not know it), we try to calculate it based on earnings. This is a step in the right direction, because it also gives us a reliable view of whether we can actually repay the loan. Having learned the other rules, we can also easily calculate whether the loan will be granted to us and what amount of liability we can count on.
Bank loan = high earnings?
The popularity of payday loans and non-bank installment loans also resulted from the fact that loan companies relaxed slightly rigid standards for future clients. Not only are all types of income accepted (even contracts for specific work, maintenance, or social benefits), but you can also get a loan, even earning little (although of course you can not expect that the loan will also be granted to people without income). Unfortunately, the bank will not look favorably on low and irregular earnings, and sometimes even a fixed-term employment contract.
So the question is not surprising: “How much do I have to earn to get a loan?”. You have to know that the bank does not set income thresholds on its own. Most often, he is bound by official guidelines and regulations that set the upper limit on the loan amount for a person with specific earnings. This is the so-called Recommendation T of the Polish Financial Supervision Authority. Pursuant to it, the loan may not exceed:
- 50% of the monthly net income, if its amount does not exceed the national average ($ 4973 gross and $ 3530 net);
- 65% of net monthly income if it is higher than the national average.
Of course, it is assumed that the borrower also meets all other conditions, has no other credit and loan obligations, as well as arrears in the BIK database, debts recorded in the National Debt Register or in other databases belonging to Economic Information Bureaus. It is also assumed that the commitment is spread over at least 12 installments (other guidelines apply for shorter periods).
Example: According to Recommendation T, a person earning the lowest national, i.e. $ 1,530 net, can pay a maximum of $ 765 a month. With an annual loan, this would not exceed $ 9,180. However, please note that the installment also includes the cost of the commitment, so you should deduct about 10% from this amount, which will give us about $ 8,200. However, this is not the final amount, because banks also apply a certain security buffer in relation to the credit levels of Recommendation T, and reduce them by an additional 20-30%. In this way, we cannot count on more than about $ 6,000 a year.
The amount of earnings in a non-bank installment loan
The amount, which is often mentioned among the criteria applicable to installment loans, is $ 500 or $ 600. This is the minimum amount that will allow you to apply for a loan at all. Unfortunately, it is not indicated what amount can be counted with such income.
The good news is that non-bank lenders are not bound by external credit limits (although they are required to investigate this). They can grant loans to anyone who, in their opinion, can repay the loan.
People who have earnings in the aforementioned amount are unlikely to get a loan in the maximum amount. However, it seems that people who earn at least the national minimum will successfully take out a loan for the amounts available from lenders, the more so that the repayment of the loan can be spread over 3 or even 4 years. A lower loan installment will allow not only the requirements of the T Recommendation to be met, but also a large supply.
Instantaneous pay and earnings
Online Payday loan is a rather unusual financial product, granted only for a very short period: 30, 45 or 60 days. Of course, to receive payday loans in the maximum amount (and they are very high: $ 7,500 in Rivus, $ 8,000 in Market Loan and $ 10,000 in Kuku), a higher creditworthiness is needed than in the case of installment loans. However, less weight will be given to whether they are regular earnings or not. The highest amounts of payday loans are not only for those whose incomes are relatively high, but also for those who are financially reliable, do not appear in any debtors’ bases and have no arrears in repayments of previous loans.
Attachment to a specific lender is also important. People who have already borrowed from a loan company several times and have successfully repaid their liabilities are more likely to get a high-value loan, even if their earnings are not high.