• Thu. Dec 1st, 2022

Low Income Loans Personal loans for a tight budget

ByCindy J. Daddario

Jul 8, 2022

When life happens, it may be necessary to take out a personal loan to stay financially afloat. If your credit is in good shape and you’re earning enough income to pay off the loan, you could be back on track sooner rather than later. But when money is tight, managing a personal loan can be challenging and have serious consequences for your finances.

Still, it’s possible to get a good deal on a personal loan by evaluating your options. Payments can still break your budget, but borrowing costs could be cheaper if you secure a competitive personal loan.

These lenders offer personal loans with low interest rates to make taking out a personal loan cheaper:

lender APR range loan amounts loan amounts minimum credit rating
upstart 5.40% – 35.99% $1,000 – $50,000 3 or 5 years indefinite
PenFed As low as 6.74% Up to $50,000 Up to 5 years indefinite
Luminous flux 3.99% – 19.99% (with automatic payment) $5,000 – $100,000 2 to 12 years 660
Pay off 5.99-24.99% $5,000 – $40,000 2 to 5 years 600
PNC bank 5.99 – 28.74% (with Autopay) $1,000 – $35,000 Up to 60 months (in select states) indefinite


Upstart offers fast approvals and funding in as little as one business day. What makes the lender even more attractive to potential borrowers is that there are no minimum credit requirements. Instead, Upstart looks beyond your credit score by evaluating your employment and education history to determine if you are eligible for a loan.


You must join PenFed Credit Union to apply for a personal loan. However, it might be worth it as there are no incorporation fees and you can apply with a joint applicant. Plus, if you have a strong credit history, the starting interest rate is among the lowest in the industry.

Luminous flux

LightStream is another exceptional online lender with competitive interest rates for personal loan products. The amounts are some of the most generous you will find, and depending on when you apply, you can be approved and funded the same day. There is also an option to choose a later financing date to coincide with when you need the loan.

Pay off

The Payoff website has a wealth of money management tools and financial education resources to help you take better control of your finances. You can check your interest rate in minutes and customize a loan product that’s right for your financial situation if there’s a match. A member of the Payoff team will be in touch with you quarterly to report back and answer your questions.

PNC bank

PNC Bank is a brick and mortar financial institution that also offers unsecured personal loans with minimal fees and competitive interest rates. Co-borrowers are also allowed if you want to boost your chances of approval. If you already have an account with PNC, you may qualify for a reduced interest rate. Also, there are over 2,600 branches nationwide if you want personal support.

Income requirements for personal loans

Lenders want reassurance that you are earning enough income to make timely loan payments. So you will likely have a minimum income requirement. Most also require proof of stable and verifiable income, such as a a recent payslip, W-2 or tax return, along with your employer’s contact information.

Consider using a personal loan calculator to view your potential monthly payment and determine how much credit you should apply for.

Other general eligibility criteria for personal loans are:

  • An active bank account that is on your behalf to send the credit process
  • An acceptable credit rating and debt-to-income ratio
  • Proof of residencesuch as a mortgage statement, lease agreement, or utility bill that includes your name and address as listed on the loan application

Keep in mind that each lender sets their own rules, so borrower requirements will vary.

How to get a low income personal loan

You may have to do some legwork to get a lower income personal loan, but it is possible. In fact, you might have better luck with an online lender with flexible eligibility criteria.

To increase your chances of approval, apply for a lower loan amount or ask a friend or relative to sign for you.

If you don’t need the money right away, consider paying down your debt, getting a better-paying job, or negotiating a raise to lower your debt-to-income ratio. Also, work on improving your credit score to potentially unlock larger amounts of credit.

Low-income personal loan alternatives

Whether you are unable to qualify for a personal loan or would rather explore other sources of funding, these options could be viable:

  • Credit cards: If you have good or very good credit, you should consider a credit card with an interest-free introductory period. If you withdraw the entire balance before the end of the promotional period, you will not pay any interest on any applicable fees. Otherwise, this form of financing could become costly, especially if you spend more than you can afford to pay back before the offer expires, accrue interest, and end up making only the minimum monthly payment for some time.
  • payday loan: These loans should only be used as a last resort for a few reasons, although they are easily accessible if you have a lower income than perfect loans. For starters, interest rates are often well into the three-digit range, some even as high as 650 percent. And as the name suggests, the balance is usually due on your next payday.
  • Secured Loans: You must provide collateral to get a secured loan. However, they are attractive to many borrowers because they can be approved with a lower credit rating and minimal income. The downside is that if you default on the loan payments, you could lose your assets.

Also, consider contacting your local credit union to inquire about personal loan options. They often make smaller loans and may agree to give you more credit if you are already a member and have established a positive relationship with the branch.

Talk about alternatives and whether they are generally better or worse. Include payday loans, secured loans, credit cards, and local credit unions

bottom line

Getting a personal loan is sometimes necessary, but lower income can make it difficult to manage. The upside is that some lenders offer flexible, affordable loan products with competitive interest rates. Before you apply, explore other funding options as they may be a better fit for your budget.