Low-Income Personal Loans

It’s a common misconception that personal loans are only for borrowers with high incomes and excellent credit scores. While high-income earners are more likely to qualify for traditional bank loans, lower interest rates, and larger loan amounts, there are still loan options available to almost anyone regardless of credit history who can prove their ability to repay

And yes, that includes low-income borrowers! 

What is a low-income loan? 

Low-income personal loans are designed for borrowers who don’t earn a high enough income to qualify for traditional loans. Direct lenders that offer low-income loans typically have more lenient loan eligibility requirements than banks or credit unions. 

Instead of basing their loan approval decision on your credit score, direct lenders consider your employment situation and whether you receive a steady paycheck. 

In addition, some direct lenders have a minimum income requirement. For example, you may not get approved for a low-income personal loan unless you earn at least $35,000 annually – although this requirement varies. 

How low-income loans differ from other loans 

There are several types of low-income loans, each being slightly different from the next. 

In general, these loans are very similar to loans for people with more sizeable incomes. The difference is that people with a lower income typically qualify for smaller loan amounts, and the repayment terms may be different. 

Why are personal loans more difficult to get with a low income? 

When a lender issues a loan, they do so with the expectation that you’ll repay the debt in full. The more money someone already has, the more likely they'll be able to repay the loan plus any interest and fees. 

As a result, lenders are more hesitant to approve a loan for someone earning a low income because the borrower simply has less money to budget for payments

Common types of low-income loans 

If you are considered a low-income earner and need a personal loan, you do have several options to consider: 

Cash Advances 

Cash Advances are small-dollar loans that can be ideal for low-income earners. Cash Advance loans are also known as Payday Loans because you repay them in full on your next payday. 

Typically, you only borrow a few hundred dollars or less to help you bridge the gap between paydays. The amount you qualify for depends on your income, job status, and where you live. 

Installment Loans 

Installment Loans allow you to borrow anywhere from a few hundred to several thousand dollars, depending on your eligibility and ability to repay. 

They get their name because you repay the money you borrow in monthly installments over a set term, which can range from a few months to years. While Installment Loans don’t necessarily require a sizeable income, they will require proof of income. 

Lines of Credit 

When you need a flexible borrowing option, a Line of Credit can be a good option. 

A Line of Credit works a lot like a credit card. When you’re approved, the lender sets a maximum borrowing amount or credit limit based on factors like your income. You can then draw from your credit line as much or as little as you’d like up to that approved limit. 

Even if you repay the amount you borrowed, your credit line stays open for future use. In addition, you only pay interest on the amount borrowed, not the entire credit line. 

Pawn shop loans 

If you don’t want to go through a direct online lender, you can also borrow money from your local pawn shop. Pawn shop loans are typically available to borrowers of all income levels. 

The downside is that pawn shop loans often have high interest rates and require you to offer something as collateral. If you’re unable to repay the loan, the pawn shop owner will keep your collateral as payment. 

Title loans 

Title loans are another type of secured loan. With a title loan, you exchange your car’s title for the loan amount. Since your car is the collateral, the amount of money you qualify for depends on your car’s appraised value. On the plus side, this means your income doesn’t factor into the lender’s decision. 

Keep in mind, though, that the lender can repossess your car if you can’t repay the loan. 

Key benefits 

In addition to helping you get out of a financial jam, low-income loans can potentially offer: 

  • Lenient qualification requirements 
  • Easy applications 
  • Flexible repayment terms 
  • Opportunities to boost your credit score (if the lender reports to the credit bureaus). 

What lenders look for in low-income borrowers 

While lenders who offer low-income loans are easier to work with than traditional lenders, they’re still in the business of making money. As such, they don’t just hand out money willy-nilly; they will have things they take into consideration during the application review process. These factors may include: 

Your credit score 

Traditional lenders check your credit score before issuing a personal loan. If you don’t have a good credit score or no score at all, you likely won’t qualify. 

Direct lenders, on the other hand, look at things other than your credit score when considering you for a low-income loan. As such, you may qualify for a loan, even if you don’t have a good credit history. 


If you apply for a secured loan, the size of your loan will depend on what you offer as collateral. A secured loan might be your only option if you don’t have any form of income. 

The size of your loan 

As a low-income earner, you have a better chance of qualifying for a small-dollar personal loan like a Payday Loan or Installment Loan. Small loans also tend to have more manageable repayment terms, which could keep you from defaulting. 

How to qualify for a low-income loan 

If you're living paycheck to paycheck and don't have a sizeable income right now, here's how you might qualify for a low-income personal loan. 

Improve your credit score 

Since your credit score is a good indicator of your ability to repay debts, the first step to receiving any type of loan is to work on boosting your credit score. When you have a good credit score, a lender may not worry as much about your total income. 

Apply for a secured personal loan 

If you don't qualify for an unsecured low-income loan, you may be able to get a secured personal loan. With this type of loan, you offer something as collateral to the lender in case you can't repay the loan amount. Pawn shop loans and title loans are examples of secured personal loans. 

Get a co-signer 

If you don’t qualify for a low-income personal loan on your own, you may be able to enlist the help of a co-signer. With a co-signer, the lender considers your cosigner's financial history and information in addition to your own. 

Keep in mind, however, that your cosigner will be on the hook if you default on the loan and can’t repay it, which can damage relationships between friends and family. 

Include all sources of income 

Lenders consider your total income when approving you for a loan. To maximize your loan amount or chances of approval, be sure to include all sources of income. This includes your full-time job, side gigs, investments, and any government assistance. 

Consider smaller loans 

If you have a low income, applying for smaller loans is smart for two reasons. First, they're likely the only types of loans you'll qualify for. Second, you'll be more capable of repaying the loan because a smaller amount is easier to budget on a low income. 

Loan alternatives 

Prioritize savings 

The more money you can save, the more likely you’ll be able to repay any future loans you might qualify for. 

Government benefits and assistance 

Depending on your income level and employment status, you may qualify for government benefits or assistance programs. Explore Benefits.gov to see what programs you might be able to utilize. 

Focus on budgeting 

In addition to saving money, it's a good idea to create a budget and stick to it. Check out our Budgeting Tips for more information. 

Look for community assistance 

If you don't qualify for government benefits, you might seek financial hardship assistance from your local community. Search for local food banks, charities, and public assistance services near you. 

Reach out to friends and family 

It’s not easy to ask for help, but it’s sometimes necessary. Even if your loved ones aren’t able to provide monetary help, they may be able to offer occasional childcare, food, or transportation. 

Try a side gig 

Starting a side gig in your free time has become a popular way to earn extra cash and supplement your regular income. 

How to apply for a loan with low income 

The great thing about low-income personal loans is that they’re easy to apply for. Here’s how it works: 

  • Step 1: Compare your lender and loan options until you find the one that’s right for you. 
  • Step 2: Depending on your lender, check your credit score and credit utilization ratio to make sure you qualify. If necessary, take measures to increase your credit score and decrease your credit utilization ratio to make you more appealing to lenders. 
  • Step 3: Gather all the necessary documents and information you will need to apply. This will vary depending on your loan and lender. Advance America, for instance, requires a government-issued ID, Social Security number, pay stubs, bank statements, and a working checking account. 
  • Step 4: Fill out the loan application online or in-store. 
  • Step 5: Review the loan terms and conditions and sign the loan agreement. 
  • Step 6: Receive your funds and spend them accordingly. 

The application process really is that simple when you apply for a low-income loan from Advance America. Unlike other lenders, we consider your income, current debts, and other financial factors rather than your credit score when considering you for a loan. 

Apply for a low-income personal loan with Advance America 

It can be challenging for low-income borrowers to find the right loan to meet their needs. That’s why we offer several personal loan options for all types of borrowers. 

Apply for a low-income loan online or at your nearest Advance America location, and we'll be happy to work with you to find the best financial solution!

About the Author

Jalin Coblentz has contributed to Advance America since 2023. His experiences as a parent, full-time traveler, and skilled tradesman give him fresh insight into every personal finance topic he explores.

The Advance America advantage

Since 1997, Advance America has helped millions of hardworking people with a variety of financial solutions including Payday Loans, Online Loans, Installment Loans, Title Loans and Personal Lines of Credit.
157+ million
loans issued
800+ stores
and online loans
25+ years
providing loans