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

There’s no universal minimum income requirement to get a loan, with each lender having its own criteria. But you could find it harder to get a loan on a low income.

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Lender Minimum age Minimum income Customer type Link
Lendable 18 £800 per month Not specified Read our review
Everyday Loans 18 No minimum income specified Not specified Check eligibility
Guarantor My Loan 18 No minimum income specified Not specified Check eligibility
118 118 Money 18 £700 per month New or existing customers Check eligibility
NatWest 18 No minimum income specified Existing customers only Check eligibility
Royal Bank of Scotland 18 No minimum income specified Existing customers only Check eligibility
Bamboo 18 No minimum income specified New or existing customers Check eligibility
1plus1 Loans 18 No minimum income specified New or existing customers Check eligibility
Zopa 20 £12,000 per year New or existing customers Read our review
Fluro 20 £850 per month New or existing customers Check eligibility
My Community Bank 21 £18,000 per year New or existing customers Check eligibility
Shawbrook Bank 21 £15,000 per year New or existing customers Check eligibility
Bank of Scotland 18 No minimum income specified Existing customers only Read our review
Barclays Bank 18 No minimum income specified Existing customers only Read our review
Ulster Bank 18 No minimum income specified Existing customers only Read our review
AIB (NI) 18 No minimum income specified New or existing customers Read our review
Halifax 18 No minimum income specified New or existing customers Read our review
Virgin Money 18 No minimum income specified Existing customers only Read our review
HSBC 18 £10,000 per year New or existing customers Check eligibility
Nationwide BS 18 £700 per month Existing customers only Read our review
Monzo Bank 18 No minimum income specified Existing customers only Read our review
Sainsbury's Bank 18 £7500 per year New or existing customers Read our review
Tesco Bank 18 No minimum income specified New or existing customers Read our review
Danske Bank 18 £16,000 per year Existing customers only Read our review
TSB 18 No minimum income specified New or existing customers Read our review
MBNA Limited 18 No minimum income specified New or existing customers Read our review
Abound 18 No minimum income specified New or existing customers Check eligibility
Lloyds Bank 18 No minimum income specified Existing customers only Read our review
First Direct 18 £10,000 per year Existing customers only Read our review
M&S Bank 18 £10,000 per year New or existing customers Check eligibility
Admiral 18 £19,000 per year New or existing customers Check eligibility
Novuna Personal Finance 21 £10,000 per year New or existing customers Check eligibility
Santander 21 £10,500+ for loans up to £19,999, or £20,000+ for loans between £20,000 and £25,000 New or existing customers Check eligibility
Creation Financial Services 23 £9,600 per year Existing customers only Read our review
Churchill 18 years £850 per month after tax Not specified Check eligibility
Reevo Money 21 years or older £15,000 Not specified Check eligibility
BetterBorrow 18 years No minimum income specified Not specified Check eligibility
Finio Loans 18 No minimum income specified New or existing customers Check eligibility
Loans 2 Go 21 No minimum income specified Not specified Check eligibility
Toot Loans 23 years or older £1,000 monthly income Not specified Read our review
Plend 21 No minimum income specified Not specified Read our review
Fluent Money 18 No minimum income specified Not specified Read our review
Minty Loans 21 years No minimum income specified Not specified Read our review
Oakbrook Loans 18 No minimum income specified Not specified Read our review
LiveLend 18 £12,000 per year Not specified
JN Bank 21 £1,000 per month New or existing customers Read our review
Norwich Trust Limited 21 £1300 per month New or existing customers Read our review
Late repayments can cause you serious money problems. See our debt help guides.

What’s the minimum income I need to get a personal loan?

While your salary plays a part in your loan application, there is no universal minimum income requirement that guarantees you will be approved for a loan. Conversely, there’s no guarantee that you’ll get a loan even if your income is well above the UK average.

When it comes to getting accepted for a personal loan, different lenders have different criteria you’ll need to meet. Some lenders might have minimum income requirements – the Post Office asks for a minimum annual income of £12000.00 Per Annum for example. But other lenders might not and will consider other aspects of your financial situation to see if you’re eligible for a loan. This could include your credit history and current debt levels, for example.

What is the debt-to-income ratio?

The debt-to-income ratio (or loan-to-income ratio) 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 with a high debt-to-income ratio will likely have trouble making payments.

Borrowers with a debt-to-income ratio of over 40% are generally considered experiencing financial hardship. By comparison, a debt-to-income ratio that’s about 20% or lower would be considered excellent.

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 just over 30%. With a 30% debt-to-income ratio, you would appear as a relatively responsible borrower.

How can I tell how much I can borrow?

The first step to determining your borrowing power is figuring out whether or not you can actually afford the loan. 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 can manage the repayments on your current budget. A good rule of thumb is that if you have a debt-to-income ratio of 40% or over, you should refrain from taking on any more debt.

How do lenders decide if I’m eligible?

When you submit an application for a loan, the lender will inquire about a number of details, such as your:

  • Income
  • Employment status
  • Current debt
  • Expenses
  • Financial commitments
  • Credit history
  • Assets that can be used as security

What if I don’t meet the lender’s requirements?

There are a few things 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 can 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. You might be ineligible because the lender thinks the loan’s fees and interest are 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.
  • Find a guarantor. You could consider asking your parents, another relative or even an older close friend to be your guarantor. This person will be taking on a large responsibility because they are agreeing to take on the loan payments if you can no longer make them.

What types of loans are available for people with low income?

If you don’t earn enough to be eligible for a personal loan, there are other options to explore.

Short term loans

The most common alternative is to look at short-term or payday loans, which generally have lower requirements than regular personal loans.

However, short term loans should be paid back quickly as they are also likely to be the most expensive form of borrowing. Interest rates can be high, so these loans should only be considered as a last resort.

Loans for people on benefits

Some lenders will consider your loan application if you receive benefits. These lenders will look at any income you earn from employment, benefits or both to help them establish whether they are happy to offer you a loan. You’ll usually only find this type of loan with specialist online lenders rather than the high street banks, and interest rates are usually higher than standard loans. Some of the benefits that can be considered include:

  • Universal Credit
  • Child and Working Tax Credit
  • Disability Living Allowance
  • Child Benefit
  • Employment and Support Allowance

Budgeting loans

If you’ve been receiving certain benefits for at least 6 months, you might also be eligible for a budgeting loan. These benefits include:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Pension Credit

This loan can help you pay for furniture and household items, rent, clothes, costs linked to moving house, travel costs, funeral costs and maternity costs. You only have to repay the amount you borrow, and your repayments are taken automatically from your benefits.

Benefits and drawbacks of getting a loan if you have low income

If you have a low income, taking out a loan can provide some extra cash to help cover household bills or emergency expenses. Many short term loans offer funds quickly – often within the same day – making them ideal if you need the money fast.

However, the risk is that you might not be able to repay your loan on time. If you struggle to pay back what you’ve borrowed, you could damage your credit rating and find it harder to get credit again in the future. What’s more, you could find yourself in a debt spiral that’s difficult to get out of. Short term loans are extremely expensive and should be carefully considered.

Bottom line

When taking out a loan, it’s absolutely crucial to be sure you can repay it in full and on time. If you have a low income, this won’t necessarily prevent you from getting a loan, but it could make it a lot harder to pay it back. Make sure you understand what you’re getting into, how much interest you’ll be charged and have a plan to repay your loan on time.

Frequently asked questions

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