Minimum income for personal loans varies by lender. Some lenders require a minimum monthly income around $1,000 to $2,000, while others require a minimum annual income around $13,000 to $17,000. Others do not specify a minimum income because they approve applications on a case-by-case basis.
Some lenders don’t even require employment since they accept non-employment income such as government benefits or private pension. Income is just one of several factors that lenders look at when deciding whether to approve you for a personal loan.
Minimum salary for personal loans from popular lenders
Other factors that affect your personal loan application
Credit score and credit history. Lenders will want to see how you’ve managed your debt and bill payments in the past. If you have a bad credit score, you have higher chances of getting approved by an online lender than a bank.
Employment. Employment requirements vary among lenders. Some will want to see full-time employment, while others are fine with part-time or self-employment as long as you meet their income requirements.
Loan security. There are two main types of personal loans: secured and unsecured. Secured personal loans involve collateral, which lowers the risk for the lender and therefore brings down your interest rate. Unsecured personal loans tend to have higher interest rate since the lender is taking on more risk.
Assets, debts and expenses. You’ll be asked to list your assets, debts and expenses. Lenders use your debt and income to calculate your debt-to-income ratio (DTI). The lower your DTI, the better.
What is a debt-to-income ratio?
Debt-to-income ratio (DTI) is a simple measurement of your monthly debt compared to your gross monthly income. This lets lenders see how you’ve managed payments for what you’ve borrowed. Typically, borrowers that have a high debt-to-income ratio will likely have trouble making repayments. Borrowers with a debt-to-income ratio over 43% are generally considered to be going through a financial hardship, while an excellent debt-to-income ratio is about 20% or lower.
Let’s say you have a total of $1,000 in bills each month and your gross monthly take home pay is $3,000 – your debt-to-income ratio is 30%. With a 30% debt-to-income ratio you would appear as a relatively responsible borrower. Calculate your DTI.
There are a few things you can do if you find out you don’t meet the minimum income requirements.
Put up collateral. Since you’re lowering the risk for the lender, you increase your chances of approval. But keep in mind that the lender can repossess your asset if you fail to make your payments, so make sure you can manage the repayments.
Apply with another lender. If the rest of your finances are solid, you can apply with a lender who doesn’t have a minimum income and approves personal loans on a case-by-case by basis.
Try your current bank. If you have a good banking history, you may have a better chance of being approved for a loan with your current bank since it will be familiar with your finances.
Apply with a cosigner. A cosigner is a family member or friend who agrees to sign the loan with you. If you default on the loan, the cosigner is on the hook to make the payments on your behalf. The cosigner’s finances must be in good shape in order to qualify.
Apply for a lower amount. If you can’t prove to the lender that you’ll be able to manage repayments for the requested loan amount, consider borrowing less. This will mean lower repayments for you and less of a risk for the lender.
It’s possible if you’re receiving government benefits like welfare or you have income from a pension or investments. However, most lenders require you to have a steady income to qualify for a loan. You can learn more about your options by checking out our guide to getting a loan when you don’t have a job.
You can, although it might be hard to qualify with some online lenders. Many use algorithm-based applications that sometimes don’t know how to recognize unorthodox proof of income. You may have better luck applying in person at a branch if you’re self-employed. Read our article on self-employed loans to learn more about what you might be eligible for.
Your borrowing power is a term that refers to how much funds you’re able to borrow. People with lots of personal savings, high income and minimal debts have a greater borrowing power than those without.
Leanne Escobal is a publisher for Finder. She has over 11 years of experience in financial services, specializing in content and marketing. Leanne has completed the Canadian securities course (CSC®) as well as the personal lending and mortgages course by the Canadian Securities Institute. She has a Bachelor of Arts (Honours) in English literature and creative writing from Western University.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
