Work and retirement in Germany are no longer a guarantee for a financially carefree life. If there is a permanent shortage in the household budget, the creditworthiness diminishes.
A typical example of a loan that would just be able to be approved on your own is the loan with USD 1,100 net. The reason for all expected difficulties in finding a provider can be found in section 850c of the ZPO.
The guide summarizes for you what requirements you have to meet for credit approval, how you can increase your creditworthiness for larger sums and ways out.
Credit with 1100 USD net – regular credit
A loan of USD 1,100 net is basically possible for unmarried borrowers without maintenance obligations or ongoing installment payments. But banks and savings banks are obliged to take special care when granting loans. You can only grant a loan to borrowers who are certain that they can prove their repayment ability.
Nevertheless, every lender must expect that a debtor cannot or will not pay. In this case, the bank initiates coercive measures. As a rule, the bank attaches labor income or pension. At this point, the attachment table attached to Section 850c of the ZPO becomes decisive.
The bank may not seize the income indefinitely, but only money above USD 1,079.99. The number mentioned corresponds to the valid garnishment table (2016). With a non-performing loan with 1100 USD net, only 11.28 USD would be attachable. – But not for everyone. If a dependent person has to be considered from this income, 1479.99 USD would be attachable.
Whether a bank takes on the risk of being able to attach “only 11.28 USD” depends on various factors. First, in-house rules decide on the scope for credit approval. Each credit institution itself determines how high the minimum earnings for lending must be. The usual amount would be around 75 USD above the personal garnishment exemption limit of the applicant. In special cases, however, it is even possible to get the smallest loan amounts approved without being attachable.
Small income loan – decision criteria
Further decision factors are the loan amount, the installment amount and the personal credit history of the borrower. The loan amount for a loan of USD 1,100 net for regular loan offers will not exceed the small loan. Except for adult children who still live in the “Hotel Mama”. In this case, a higher repayment capacity can be assumed than with some family members with very good incomes.
The rate must be proportionate to the budget surplus. With 1100 USD net income in the Hotel Mama no problem. But with your own household, only very small installments are not overwhelming. If the Credit bureau excerpt shows that in the past low-income loans had already been granted and paid off without problems, it would be a further plus point. The small list shows how complex the valuation of a loan with 1100 USD can be.
Any blanket statement: “Your money is already waiting for you” would be completely exaggerated, unless a short-term loan is an option. A short-term loan, such as the overdraft facility and the overdraft on a credit card, are measured by other standards. In this case, lenders cover the high risk through extremely high interest rates. In this case, however, about twice the monthly income is also over.
If it is only a matter of very small loan amounts, for example 500 USD for 30 days, intermediaries like Vexcash offer the solution. The minimum lending requirement is 600 USD net per month.
Car loan with 1100 USD net – how it works
With a small income, big leaps cannot be made. Nevertheless, practically all workers outside the metropolitan areas rely on their cars. The car loan for a decent used car is therefore unavoidable even for people with an income of 1100 USD. On its own, hoping to secure the real value of the vehicle, the loan will only work with an extremely high down payment.
For most borrowers with a small net income, the only way out is to ask a guarantor or co-applicant for help. In this case, the good creditworthiness of the solvent guarantor compensates for the creditworthiness restriction due to the low income. If problems arise in the course of the repayment period, the lending bank adheres to the guarantor.
It does not take a real loan risk, so the possible loan amount corresponds to the real creditworthiness of the co-applicant or the citizen. Regardless of the purpose, the solvent co-owner is the key to a large loan despite small income.
Special financing – loan with 1100 USD net
Without solvent co-owners, it is difficult for small incomes to borrow an adequate amount of money. In difficult cases, as long as the ability to repay would be clearly demonstrable, private donors could step in as creditors.
Loans with 1100 USD net from private, via Best Lender or Good Finance, has been one of the serious credit options for years when banks do not grant a loan. Of course, private investors are looking for a safe investment. However, unlike commercial lenders, they are not restricted in their freedom of choice.
A loan of USD 1,100 net is given by people who can convince a sufficient number of investors to lend. It is not uncommon for an understanding of the difficult situation, with simultaneous proof of the safe repayment, to be the decisive element.