Bank loans stand out from other financial products on the market with clearly defined conditions. To obtain it, the bank requires the client to comply with several basic principles. In addition to creditworthiness and adequate financial condition, income is also important. Let’s get to know how much money you have to earn to get a cash loan.
Some expenses that appear on the consumer’s path may prove to be too expensive to be financed from current funds. At the same time, they can also be urgent, which means that many are starting to search for the right source of financing. In this situation, financial sector services may be helpful.
Consumers often turn to loans and payday loans to finance expensive expenses. The other scales include banks that are fighting for customers, eg with cash loans. There are significant differences between these entities. At a time when loan companies do not always need to check in BIK or require income certificates, for example, banks treat these elements as an essential element of the offer regulations.
What is the importance of earnings when applying for a loan?
When searching for popular questions related to cash loans, you can often find the amount of earnings required by the bank that will allow you to obtain a positive credit decision. Indeed, it is worth remembering this issue, because it is of key importance in the process of applying for a loan. The amount of earnings has an indirect impact on the total amount of the loan, and hence – the amount of monthly installments.
Earnings, of course, obtained from a legal source of employment regulated by the contract, allow the bank to assess the financial condition of the consumer. They shed light on how much you can spend on a loan installment. This is assessed in conjunction with the verification of marital status, number of dependents, monthly expenses and incumbent obligations. Earnings, therefore, have a key impact on whether you get a cash loan in the amount you originally applied for.
What is a cash loan?
A cash loan is a consumer loan, ie a commitment incurred by the consumer (non-entrepreneur) for private expenditure. From, for example, a mortgage, such liabilities are distinguished by a slightly lower average amount and also by their purpose. In the case of consumer credit, it can be practically any. The consumer may enlist him, eg for the need to buy electronics or a car. In addition, for renovation of the apartment, holidays, financing expensive treatment and other expenses.
Another distinguishing feature of this commitment is the smaller amount of collateral. This is due to the amounts that fluctuate in the case of cash loans. Banks usually grant them for lower amounts than in the case of mortgage loans. These, according to BIK 1 data, are worth on average around 254,000 dollars. According to the banks, cash loans, due to a lack of purpose and considerable value, do not generate the need to buy eg credit insurance and bridging insurance, as is the case with a mortgage.
What is required to get a cash loan?
Before we move on to the basic issue required during the verification process, earnings and financial condition, it is worth presenting other necessary requirements of banks.
- Creditworthiness. The Bank checks entries in the Credit Information Bureau register to assess, among others possible debt (current or repaid). In addition, the amount and amount of current liabilities is also checked. In addition, whether recently the consumer has already tried unsuccessfully to apply for a loan in this or other banks.
- The right age. Banks provide their clients with specific age limits in their tariffs, which must be strictly met in order to potentially become a borrower.
- Job. The bank also asks the consumer to provide documents informing about its employment. The workplace and position will be checked. In addition, it is verified what type of contract the employment relationship is regulated for and when and for how long.
How much do you have to earn to get a cash loan?
Theoretically, anyone with a proven income can apply for a cash loan. If it has good creditworthiness and does not have any large liabilities (loans, other loans, high rents, expensive monthly expenses), even the lowest national earner can apply for a cash loan.
Depending on the amount of earnings of people with good creditworthiness who meet other conditions desired by banks, however, strict loan parameters will be established. The bank will assess how much total sum it can give to the consumer. In addition, it will also determine the amount of the monthly installment so that the borrower’s repayment is not a potential impediment. Unfortunately, getting lower earnings, such as the national minimum (in 2019 – 2250 dollars gross / 1634 dollars net 2), sometimes it may turn out that the loan amount will be lower than what was expected by the consumer.
Determining individual loan parameters by the bank results from its competences established by the banking law 3. Article 69, describing the necessary elements of the loan agreement, gives the bank the freedom to set the amount of the loan installments and the repayment date. Therefore, it depends on the individual rules for granting cash loans in a given bank which loan you can count on.
Given the above-mentioned information, the question “How much do I have to earn to get a cash loan?” Can be answered: the amount of expected earnings is arbitrary if you have good creditworthiness, low monthly liabilities (eg insurance, other loans), and the cost of living does not take everything from your monthly salary.
Unfortunately, if, for example, apartment charges and monthly expenses turn out to be too high (amounting to income or occupying a significant part of it), even if the creditworthiness is good, the bank may issue a negative decision on granting the loan.