How much money do you need to make to get a personal loan?

What is the minimum income required to get a personal loan?

There isn’t one set minimum to take out a loan. The requirements vary by lender and how much you need to borrow.

Even though many lenders have no minimum income requirement, they’re still assessing other aspects of your financial situation to see if you’re capable of handling a loan. A big factor that comes into play here is your debt-to-income (DTI) ratio.

What income do I need to earn to be eligible?

Here are the income requirements for a selection of top online providers:

How can I tell how much I can borrow?

The first step to determining your borrowing power is calculating whether or not you can actually afford it. Work out your repayments based on the interest rate, fees, loan amount and loan term of your chosen personal loan. After you’ve done this, determine whether you’ll be able to manage the repayments on your current budget.

Calculate how much you can borrow

How do lenders decide if I’m eligible?

When you submit a loan application, the lender will inquire about several details. These may include:

• Income
• Employment status
• Current debt
• Expenses
• Financial commitments
• Credit history
• Assets you can offer as security

Additional eligibility requirements

What if I’m not qualified?

Here’s what you can do if you find out you don’t meet the minimum income requirements:

• 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.
• Choose a more affordable loan. The reason you might be ineligible could be that the loan has fees and interest that the lender thinks is too expensive for you. Other loans may have lower interest rates and fewer fees, and in turn will give you a better chance of managing the repayments.
• Try your current bank. If you have a good banking history, you probably have a better chance of being approved for a loan with your current bank. You may be able to find product details on your bank’s website.

4 steps to take if your application is rejected

Bottom line

How much you need to earn to get a loan depends on how much you want to borrow. Generally, the higher your income, the more you’re able to borrow.

However, other factors like your credit score and DTI can play a crucial role in whether or not you’re approved — and how much you can borrow. You can find out more about how personal loans work by reading our guide.

Frequently asked questions

• Can I get a personal loan if I'm unemployed?

  It’s possible if you’re receiving benefits like Social Security or a pension. However, most lenders require you to have 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.

• Can I get a loan if I'm self employed?

  You can, though 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. Read our article on self-employed loans to learn more about what you might be eligible for.

• Can I get a personal loan with a low income?

  You can as long as you can afford your monthly repayments. For this reason, you might not be able to borrow large loan amounts. Personal loans typically start at $5,000, though some lenders offer financing as low as $1,000 or $2,000.

  If you can’t afford this amount, you might want to consider your short-term loan options or look into alternative ways to borrow.

• What does borrowing power mean?

  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.