Best Low Income Personal Loans in 2024

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ByChristopher Boston
Edited byVictoria Copans
Contributions by6+ experts
ByChristopher Boston
Edited byVictoria Copans
Contributions by6+ experts

Updated: May 6, 2024

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If you're struggling to secure a personal loan on a low income, you're not alone — many grapple with the constraints of limited earnings. The lending scene can often seem stacked against those with smaller budgets, with lenders questioning their ability to manage monthly payments and settle debts.

However, the lending world is vast, and it's not just about the size of your paycheck. Some lenders have crafted their offers precisely for those navigating these challenges. With a blend of good credit and informed choices, doors can open even in the tightest financial spots.

What Is a Low-Income Personal Loan?

A low-income personal loan is a financial solution designed for individuals who might not be in a high earning bracket but require financial assistance. These loans recognize that not everyone has a sizable paycheck, yet they might still be financially responsible and capable of repaying borrowed amounts.

Typically, traditional lenders consider income as a major factor in determining an applicant's loan eligibility. However, lenders offering low-income personal loans are more accommodating, sometimes emphasizing on other factors like credit history, financial behavior or employment stability. The aim is to assist those who might be underserved by conventional loan offerings, ensuring they, too, have access to needed funds.

Compare Lenders Who Offer the Best Low-Income Loans

Securing the right loan can be more challenging when you're working with a tighter budget, but there are lenders who specifically cater to those with lower incomes. In this section, we'll guide you in pinpointing the best ones tailored to your financial situation.

WHY TRUST MONEYGEEK?

We reviewed more than 30 personal loan lenders using 35+ individual data points across six key categories: loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency. Using this information, we narrowed down the best personal loans for individuals with low credit scores.

Here at MoneyGeek, we value you, the consumer, so we also factor in each lender’s customer support, business ratings and additional features that could make your experience easier and more accessible, like prequalification, payment options and mobile apps.

After careful consideration and calculation, our picks are made with your best interest in mind. Our personal loan recommendations and expert tips are meant to help you make the best decision when choosing a lender that meets your needs.

Overall Winner: Upgrade


  • Upgrade

    • 5.94% to 35.47%APR Range
    • 560Minimum Credit Score
    • $1,000 to $50,000Loan Amount Range
    • 36 to 60 monthsRepayment Terms
    • Same DayTime to Receive Funds

    Upgrade offers one of the best personal loans for low-income limits, supporting a wide range of credit scores and incomes. The company only requires a minimum credit score of 560, making its loans a great way to build credit even if you have a low income. However, Upgrade’s APR range gets very high for borrowers who are not well-qualified.

    Upgrade only conducts soft credit checks during the application process, which do not affect your score. Low-income borrowers can also apply for a temporary reduction of their monthly minimum or a permanent modification of their loan if they are finding it difficult to meet the minimum payments

    However Upgrade’s personal loans may not be suitable for those with good or excellent credit scores, as other lenders offer lower APR rates, higher loan amounts and little to no origination fees.

    Pros

    • Pays creditors directly for debt consolidation
    • 1% autopayment discount rate
    • No prepayment penalty
    • No minimum income requirement
    • Reasonable minimum credit score requirement

    Cons

    • $50,000 loan limit
    • Up to 35.47% interest rate
    • Up to 8% origination fees
    • Has late fees
    • Many restrictions on fund usage
    • APR range: 5.94%–35.47%
    • Minimum/maximum loan amount: $1,000–$50,000
    • Minimum credit requirements: 560
    • Repayment terms: 36 to 60 months
    • Time to receive funds: Same Day
    Upgrade

Runner-Up: LendingClub


  • LendingClub

    • 7.04% to 35.89%APR Range
    • 600Minimum Credit Score
    • $1,000 to $40,000Loan Amount Range
    • 36 to 60 monthsRepayment Terms
    • Next DayTime to Receive Funds

    LendingClub is a fully digital marketplace bank offering personal loans with reasonable requirements. With a minimum credit score of 600 and no minimum gross income requirement, qualified borrowers can easily get the funds they need.

    Personal loans from LendingClub are best for those who need a small loan amount, as it offers loan amounts from $1,000–$40,000. Because joint applications are allowed, co-borrowers can enjoy higher loan amounts and more competitive rates.

    Loans from LendingClub also come with a one-time origination fee, which ranges between 3% and 6% and is considered expensive compared to other lenders. This is calculated based on your loan amount and credit rating when you apply.

    However, not all borrowers will benefit from LendingClub, as its rates may not suit those with good or excellent credit.

    Pros

    • Moderate credit score requirement of 600
    • Joint loans are available
    • No debt-to-income limits
    • No minimum gross income requirement
    • Conducts soft credit checks

    Cons

    • High APR range
    • Relatively high origination fees
    • Limited loan term options
    • Limits use of funds
    • Has an employment requirement
    • APR range: 7.04%–35.89%
    • Minimum/maximum loan amount: $1,000–$40,000
    • Minimum credit requirements: 600
    • Repayment terms: 36–60 months
    • Time to receive funds: Next Day
    LendingClub

Best for Debt Consolidation: Upgrade


  • Upgrade

    • 5.94% to 35.47%APR Range
    • 560Minimum Credit Score
    • $1,000 to $50,000Loan Amount Range
    • 36 to 60 monthsRepayment Terms
    • Same DayTime to Receive Funds

    Upgrade offers loans in amounts as low as $1,000 and as high as $50,000. If qualified, you may get an interest rate as low as 5.94%. Getting funds also does not take long as Upgrade releases money on the same business day that your loan application is approved. For convenience, the company accepts online applications. Borrowers can access their loan information through its mobile app.

    However, Upgrade may not be a great option for some individuals. For example, the company does not allow borrowers to use the money to fund their post-secondary education. Upgrade also has a 2.9%–8% origination fee. Finally, if you have a credit score below 560, an Upgrade personal loan is not for you.

    Pros

    • 1% auto payment discount
    • No prepayment penalty
    • No minimum gross income requirement
    • Same-day funding

    Cons

    • 2.9%–8% origination fee
    • Charges late fees ($10)
    • Does not accept those with new or no credit
    • Cannot be used for post-secondary education
    Upgrade

Best for Low Rates: LendingPoint


  • LendingPoint

    • 9.99% to 35.99%APR Range
    • 590Minimum Credit Score
    • $2,000 to $36,500Loan Amount Range
    • 24 to 60 monthsRepayment Terms
    • Next DayTime to Receive Funds

    LendingPoint, a financial technology platform founded in 2014, reviews loan applications and approves loans using proprietary algorithms and artificial intelligence. You can apply for loans ranging from $2,000 to $36,500 if you have a minimum credit score of 590 and an annual salary of at least $20,000.

    Apart from its A+ rating with the Better Business Bureau and low eligibility criteria, the company's noteworthy qualities include the absence of a prepayment penalty and speedy loan processing. Depending on your creditworthiness, you will be offered a loan with a fixed annual percentage rate (APR) between 9.99% and 35.99%.

    Additionally, the company does not place restrictions on loan usage. As long as the intended use is legitimate, you are good to go. However, LendingPoint may not be for you if you wish to apply for a joint loan or want a co-signer. Additionally, West Virginia and Nevada residents are not eligible to apply.

    Pros

    • No restrictions on usage of funds
    • Next-day funding
    • Moderate credit score requirement
    • Soft credit inquiry
    • No prepayment penalty
    • Low minimum income requirement

    Cons

    • Charges origination fee of up to 6%
    • Higher than average APR
    • Maximum loan amount of $36,500
    • No autopay discount
    • Charges $30 late fees
    • No co-signed or joint loans
    LendingPoint

Best for Same-Day Funding: Ally


  • Ally

    • 0% to 26.99%APR Range
    • Not DisclosedMinimum Credit Score
    • $500 to $65,000Loan Amount Range
    • Not DisclosedRepayment Terms
    • Same DayTime to Receive Funds

    Ally Lending is the lending division of Ally Financial, which offers personal loans to consumers through certain service providers in the healthcare, home improvement, automotive and retail industries. Its unique business model allows service providers to offer zero-interest financing at their discretion, which can be beneficial for consumers with fair or strong credit scores.

    It’s worth noting that Ally Lending’s services are not available in all 50 states.

    Pros

    • No application fees
    • Prequalification doesn’t impact your credit
    • No prepayment penalties
    • Offera interest-free loans through some providers
    • You can easily set up your account and manage your loans online

    Cons

    • You can only apply through a provider and not directly from Ally Lending
    • Repayment terms and credit score requirements are undisclosed
    • You do not get a discount for automatic payments
    Ally

Why Apply for a Low-Income Personal Loan?

Navigating the financial world with a limited income can be challenging. However, low-income personal loans are a beacon for those who might feel cornered by traditional lending criteria. These loans specifically cater to individuals who may not be earning top-tier salaries but still need financial assistance for a myriad of reasons. But why should you consider such a loan? Here are some of the advantages and the specific situations where these loans shine.

Advantages

  • Accessibility: Low-income personal loans are specifically designed for those who might be ineligible for standard loans due to their income, providing a borrowing avenue that might otherwise be closed.
  • Flexible Criteria: These loans often consider other factors beyond just income, such as employment stability, creditworthiness or even personal references. This broader criteria set can benefit those with strong financial behaviors but lower earnings.
  • Short-Term Relief: Low-income personal loans can offer temporary financial relief for urgent needs, helping bridge the gap until the next paycheck or financial influx.
  • Potential for Improved Credit: If managed responsibly, these loans can also serve as a means to build or improve one’s credit score, opening doors to better financial products in the future.

Specific Scenarios

  • Emergency Expenses: Whether it's an unexpected medical bill, car repair or home emergency, these loans can provide the funds needed when savings fall short.
  • Educational Pursuits: A low-income loan can be the stepping stone to a brighter future for individuals looking to further their education but lacking the upfront funds.
  • Consolidating High-Interest Debt: If you've accrued high-interest debts from multiple sources, a low-income personal loan can help consolidate these into a single, more manageable payment, potentially at a lower interest rate.
  • Major Life Events: Events like weddings, relocations or the birth of a child can come with hefty price tags. A low-income personal loan can provide the financial support to make these events smoother.

Types of Low-Income Personal Loans

Low-income personal loans come in various shapes and sizes, each with unique characteristics, advantages and potential pitfalls. Here’s a rundown of some of the most common types to help you decide which might be the best fit for your needs.

Secured Loans

Secured loans require you to offer an asset, such as your car or home, as collateral. The advantage is that they often come with lower interest rates due to the collateral. However, the disadvantage is the risk of losing a valuable asset if you can't repay the loan. These loans are best suited for those with valuable assets who are confident in their ability to repay.

Unsecured Loans

Unsecured loans don't require collateral; approval is based on your creditworthiness and other factors. The advantage is that there's no risk of losing a personal asset. However, the disadvantage is that they may come with higher interest rates. These loans are best for those without significant assets or who are unwilling to risk their assets.

Payday Loans

Payday loans are short-term loans due by your next payday. The advantage is quick access to cash when you need it urgently. However, the disadvantages include high interest rates and the potential for falling into a debt trap if not managed carefully. Payday loans are best for emergencies, but it's crucial to be cautious due to the high cost.

Installment Loans

Installment loans involve borrowing a lump sum and paying it back in regular installments over a set period. The advantage is predictable monthly payments, making budgeting easier. However, they may come with higher interest rates. These loans are best for larger expenses that you want to spread out over time.

Credit Builder Loans

Credit builder loans hold the borrowed money in a secure account until it's paid off, helping build or improve your credit score. The advantage is improved credit. However, the disadvantage is that funds are not immediately accessible. These loans are best for those looking to establish or repair their credit.

Alternatives to a Personal Loan When You Have Low Income

While personal loans can be a valuable financial tool, they may not always be the best option, especially when you have a low income. Here are some alternative financial avenues and strategies to consider:

1. Budgeting and Savings: Before considering any loan, evaluate your budget. Are there areas where you can cut back or save more? Creating a practical budget and building an emergency savings fund can help you cover unexpected expenses without the need for a loan.

2. Government Assistance Programs: Depending on your situation and location, various government assistance programs may provide financial aid, food assistance or housing support. These programs are designed to help low-income individuals and families.

3. Nonprofit Organizations: Many nonprofit organizations offer financial assistance, food and support services to individuals facing financial hardship. They can be a valuable resource for those in need.

4. Side Gigs or Part-Time Work: Explore opportunities for part-time work or side gigs that can supplement your income. The gig economy offers numerous options, such as freelance work, ride-sharing or delivery services.

5. Negotiating With Creditors: If you have existing debts, consider negotiating with your creditors for more favorable terms. They may be willing to lower interest rates or create a more manageable repayment plan.

6. Credit Counseling: Seek assistance from a reputable credit counseling agency. They can provide guidance on managing your finances, creating a debt repayment plan and improving your credit score.

7. Community Resources: Local community organizations and churches often provide assistance to residents in need. They may offer food pantries, utility bill assistance or other forms of support.

8. Peer-to-Peer Lending: Explore peer-to-peer lending platforms where individuals can lend money to others. The eligibility criteria may be more flexible compared to traditional lenders.

9. Borrowing From Family or Friends: If possible, consider borrowing from friends or family members. Be sure to formalize the arrangement with a written agreement and clear repayment terms to avoid misunderstandings.

10. Credit Cards: While not ideal due to potentially high interest rates, a credit card can provide short-term relief for small expenses if managed responsibly. Avoid accumulating excessive credit card debt.

How to Apply for a Personal Loan with Low Income

Getting approved for a personal loan with a low income may require a bit more effort, but it's entirely possible. Follow these steps to increase your chances of securing a personal loan:

1
Check Your Credit Score

Review your credit report and ensure it's accurate. A higher credit score can improve your eligibility for loans. You can access a free credit report once a year from each of the major credit bureaus.

2
Improve Your Credit Score

If your credit score is less than ideal, take steps to improve it. This can include paying down existing debts, making payments on time and addressing any errors on your credit report.

3
Evaluate Your Budget

Understand your financial situation thoroughly. Determine how much you can comfortably afford to borrow and repay. Lenders often consider your debt-to-income ratio when assessing your loan application.

4
Shop Around for Lenders

Research various lenders, including banks, credit unions, online lenders and peer-to-peer lending platforms. Each may have different eligibility criteria and loan terms.

5
Consider Secured Loans

If your credit score is a concern, explore secured loans, which require collateral. Offering an asset like a vehicle or savings account as security can increase your chances of approval.

6
Prepare Documentation

Gather the necessary documentation, including proof of income, employment history, identification and financial statements. Lenders will require this information to assess your application.

7
Build a Strong Loan Application

Craft a compelling loan application. Explain why you need the loan, how you plan to use the funds and how you intend to repay it. A well-thought-out application can make a positive impression on lenders.

8
Seek a Co-Signer

If your income and credit score are insufficient, consider asking a trusted family member or friend with a stronger financial profile to co-sign your loan. Their creditworthiness can bolster your application.

9
Apply for Smaller Loan Amounts

Request a smaller loan amount that aligns with your income. Smaller loans are often easier to qualify for and can be more manageable in terms of repayment.

10
Be Cautious With High-Interest Loans

Be cautious when it comes to high-interest loans, such as payday loans, which can lead to a cycle of debt. Explore other options before resorting to these costly loans.

11
Compare Offers

Carefully compare loan offers, considering interest rates, repayment terms, fees and total borrowing costs. Choose the loan that best fits your financial situation.

12
Apply Online or In-Person

Complete the loan application process either online or in-person, depending on the lender's preferred method. Follow the lender's instructions and provide all requested documentation promptly.

13
Review Loan Terms

Before accepting a loan, thoroughly review the terms and conditions. Ensure you understand the interest rate, repayment schedule and any associated fees.

14
Repay Responsibly

Once you secure a loan, make timely payments to build a positive credit history and avoid additional financial strain.

Remember that patience and perseverance are key when applying for a personal loan with low income. By taking proactive steps to improve your financial health and researching your options, you can increase your chances of approval and secure a loan that meets your needs.

Frequently Asked Questions

Navigating the world of low-income personal loans can raise numerous questions. To provide clarity and guidance, we've compiled a list of frequently asked questions addressing common concerns and queries about obtaining and managing these financial solutions.

How do I qualify for a low-income personal loan?
Can I get a low-income personal loan with bad credit?
What is the typical interest rate for low-income personal loans?
Are there government programs that offer low-income personal loans?
How can I improve my chances of getting approved for a low-income personal loan?
Are payday loans a good option for low-income individuals?
Can I use a low-income personal loan to consolidate debt?
What should I watch out for when considering a low-income personal loan?
Is there a minimum income requirement for low-income personal loans?
Can I apply for a low-income personal loan online?

Expert Advice on Best Low-Income Loans

  1. In what ways does an applicant's financial history impact their ability to get a personal loan? How does income impact ability to borrow?
  2. What tips and tricks can help someone get access to loans with the lowest interest rates?
  3. If a person is unable to borrow the full amount that they need due to their income, what do you recommend?
Dan Kresh
Dan KreshFinancial Advisor at Creative Wealth Management, LLC
Amoree Farnsworth, CFP®
Amoree Farnsworth, CFP®Financial Advisor at Net Worth Advisory Group
Sahar Milani, Ph.D.
Sahar Milani, Ph.D.Associate Professor of Economics at St. Lawrence University
Jared Watson, Ph.D.
Jared Watson, Ph.D.Assistant Professor of Marketing at New York University Stern School of Business
Gregory Germain
Gregory GermainProfessor at Syracuse University College of Law
Neal Hansen, CFP®
Neal Hansen, CFP® Financial Advisor at Net Worth Advisory Group
Ben Lourie
Ben LourieAssociate Professor of Accounting at The Paul Merage School of Business at the University of California, Irvine

About Christopher Boston


Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.


sources
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The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.