Lenders are becoming more consumer-conscious when dealing with their customer base. With a growing need of lending products especially designed to meet the lending needs of consumers from all backgrounds, consumers now have more choices than ever when pursuing loans. This has affected how lenders cater to their customers. Some are now offering income based loans completely online.
What is an income based loan?
An income-based loan is a form of a short-term loan. The short loan amount is determined by your income. The goal is to make sure that you can easily repay the loan, so they only lend what you are comfortable with repaying. These lenders recognize the need to lend to people who may have less than perfect credit or low income and want to do business with everyone. These loans are designed for people on unemployment and disability as well as those with moderate income. The loan amounts are designed for people who earn less than $1,000 a month. Most of the low-income loans made average under $500. The interest rate for these loans tend to be higher because the loans are short term.
How are income based loans used?
Low income based loans are used for short term purposes. People who usually take out these loans are in some sort of a financial bind or are experiencing a cash emergency of some sort. People who have temporary cash needs may have to pay an unexpected expense or bill. They often turn to these lending products to provide them with the short-term solutions they need.
How much can you borrow for loans with limited income?
Your loan amount is determined by several factors. Your checking account may be used to examine cash flow. If you have no checking account, your paycheck and employment history may be all that is needed to qualify for these short-term loans. The short-term loans will never exceed your earnings. This is because these loans are supposed to be easy to repay back. Low income loans rarely exceed $500, but some lenders may be flexible if verifiable income documentation is submitted.
Can I borrow the maximum amount?
You can borrow the maximum amount. The maximum amount permitted is determined by your take home pay. Your pay stubs are used to calculate your maximum amount you are permitted to borrow. Once your application is submitted, they will provide you with a threshold amount you qualify for as a borrower. You can choose to borrow the maximum or a smaller amount. It is always recommended that you borrow less than what you need.
Your loan amount is determined by how much you earn. Your income, whatever the source, determines how much you are able to borrow. Your short-term loan’s first payment is usually due on your payday. All subsequent payments are scheduled to coincide with your payday. You are encouraged to factor in the interest rate when considering the various lending options available to you.