With a small income, it is more complicated to get a loan from the banks. It is necessary to provide supporting documents and the strict conditions exclude low wages and unemployed persons. In these conditions, how to undertake projects in life? There are solutions adapted to these situations, especially the small salary credit.
Difficulties accessing credit for small budgets
For unemployed people, people in precarious situations such as fixed-term contracts or those stuck at the Bankory, the procedures for obtaining a “classic” credit are sometimes complex, even discouraging. Credit institutions often ask for supporting documents such as pay slips and credit history. In addition, banks are looking at the debt ratio. It must generally remain below 50% and sometimes even 40%. With a small income, this rate rises rapidly as illustrated by this example: with 1,150 euros of income per month, a person paying a monthly rent of 500 euros will have a debt estimated at 43%. In this case, a request for a personal loan is unlikely to succeed because banks impose too strict conditions on borrowers. On the other hand, there is a low-wage credit solution: revolving credit and consumer credit in general.
Small credits for small income
Contrary to popular belief, there are many credit solutions for small budgets. Among these small credits:
- Interest-free loans between individuals: as the name implies, natural persons are substitutes here for conventional lenders, which are credit institutions.
- micro credit granted by CAF and ADIE (Association for the Right to Economic Initiative): this type of small credit is particularly suitable for people over-indebted or stuck at the Bank of France. In the case of ADIE, this credit can reach € 3000 provided that this sum is allocated to a professional integration project (driving license or training for example).
- revolving credit: this is a form of consumer credit offering people with a small salary a cash reserve.
To obtain a personal loan and benefit from its advantageous interest rates, a person with low incomes will have to perform a simulation in order to properly calibrate the monthly payments and the commitment period to ensure his / her debt ratio.