Contrary to appearances, you don’t have to earn a lot to get a loan. More important than the amount of earnings is that they are regular. We advise you on exactly what conditions must be met to take a loan.
How much do you have to earn to get a loan? This question will be asked sooner or later by anyone applying for a loan. The tightening of lending policy has made banks look more closely at potential borrowers than a few years ago. They also take into account the more real than before costs of living. When estimating the creditworthiness of future customers, banks assume that one person spends about $ 800 a month on maintenance. Only after deducting this amount from our earnings (assuming that we have no other obligations) will the bank count how much we are able to spend on paying the installment.
Earnings are not everything
When applying for a loan, not only income is important. When assessing our creditworthiness, the Bank will take into account the form and stability of employment, the position held and the length of service. Features such as age, gender and relationship status will also be relevant. People applying for a loan on their own will receive it on worse terms than those who want to take it with someone. Why does the bank calculate our creditworthiness? To make sure that after deducting the cost of living, we will still be able to pay the installments.
In addition to creditworthiness, creditworthiness is also important, ie we have paid our debts so far. The bank will look at how many liabilities we are currently paying. The more active debts, the less creditworthiness, and thus – less chance of receiving financial support. If we have been paying all installments on time and meticulously, we can be completely calm about our credit history.
You do not have to be employed under an employment contract to receive a loan. Although it is best rated by the bank (especially one concluded for an indefinite period), the mandate contract or contract for specific work does not prevent our chances of receiving an injection of cash. Assuming that our seniority is long and the earnings are quite high, we can apply for a loan even when we are employed on the basis of a civil law contract. Depending on the bank, the required period of employment for such contracts is one or two years. However, confirmation of our earnings will be, for example, an account statement or a recent tax declaration.
It is also worth knowing that childless people have a higher creditworthiness than single people who receive the same income. Why such discrepancies? Therefore, although the cost of living can be similar in both cases, if the borrower is in a relationship, they are divided into two. Thus, they are smaller than those of a single who has no cost to live with.
Loan and income certificate
How much we earn is the basis for the bank’s calculation of creditworthiness. To be able to document your earnings, we need an income certificate. We will receive such “paper” from the employer. It is a confirmation for a financial institution that the amount of our monthly salary agrees with what we entered in the credit form. If we are not working and our income comes from a pension, then we present to the bank a document confirming that we receive such a benefit. For loans for higher amounts, we will sometimes need to attach a personal account statement from the last 3 or 6 months to the application. In the case of a cash loan, a loan based on the statement is also possible.Then we provide the amount of our earnings and we bear legal responsibility for the accuracy of the information contained in the application.
Regular income is the key to success?
We can apply for a loan regardless of the form of employment or income. If we receive any bonuses or allowances in addition to our salary, be sure to include it in the application. The most important criterion, however, is not just the amount of earnings, but creditworthiness. Thus, even a small but regular income will open the way to receive the desired financial support.
Thinking about how much money you have to earn to get a loan, remember that in the case of civil law contracts, the bank will not take into account the entire income we receive. Depending on the particular lender, this will be 50% or 80% of our current salary.
How much you have to earn to get a cheap mortgage depends also on what property you plan to buy. We will need a different amount to buy a studio in a small town, and another to buy a two-room apartment in Warsaw. The price of an apartment depends on, among others location, area, city, apartment standard etc.
How much do you have to earn to get a loan? Summary
The bank will grant credit only to those who can afford it. What does this mean in practice? The fact that if we want to receive a loan, we should earn enough that after paying the installment we would have enough to “live”. If we are afraid that too low earnings may be the reason why our application will be rejected, let’s take a loan with another person. We will then be able to count on better credit terms than when applying for a solo loan.
We should remember that the amount of earnings is an important, but not the only criterion, which the bank uses. However, the amount we earn has a significant impact on the amount of credit that the bank will grant us. With irregular incomes, the source of which is self-employment or a civil law contract, the amount of support received may be lower than the one we requested.
The final terms and methods of calculating creditworthiness depend on the particular bank. Therefore, if you are not sure whether our earnings are sufficient to receive a loan, choose the bank that has the most advantageous offer.