How Can You Get a Personal Loan with a Low Salary?

Personal Loans

Updated on Mar 15, 2019

View more like this | Visit India, UN | Contact Arwind Sharma
Image for How Can You Get a Personal Loan with a Low Salary? with ID of: 3296095
During a financial crisis, getting a loan to address the expenses could seem the obvious choice. However, it is difficult for low-salaried individuals to obtain any credit. This is because banks usually target high-income groups with attractive offers on credit cards and personal loans based on their repayment capacity. However, not every lender sets a high income as an eligibility criterion for offering personal loans.

This article lists down five options for low-salaried individuals to get low salary personal loans:

1. Commercial banks and NBFCs

Many commercial banks and non-banking finance companies offer low salary personal loans to individuals earning less than Rs. 10,000 per month. In some cases, the lenders may require the borrower to reveal an alternate source of income. Once the financial institution finds you eligible for a loan, your application can be processed quickly. On due verification of essential documents, the sanctioned amount is credited in your account.

2. Co-operative banks

A significant benefit of availing a personal loan from a co-operative bank is lower interest rates. On average, most leading co-operative banks charge 15% or less. In addition, they have flexible terms and conditions with nil processing or prepayment fees. However, in exchange for these benefits, co-operative banks may require borrowers to buy its shares, keep security, add guarantors and become their members.

3. Cash loans

Cash loans are personal loans with a short tenure and a small amount. If you need instant credit, this can be a good option. Based on your personal loan requirements, you can approach any of the following lenders:

a) Mobile wallets

Digital payment apps such as Paytm, PayU, MobiKwik, and others, offer cash loans. Based on your transaction history, you may be given a pre-offered loan. On the other hand, you also have the option to apply exclusively. It is important to note, that these app companies collaborate with financial lenders (NBFCs) to provide loans and don’t provide it themselves.

b) Peer to peer (P-2-P) lending companies

Many online marketplaces or crowd-funding platforms help borrowers connect with lenders. All you have to do is upload your details on the website and lenders who are willing to give you a cash loan can approach you. The borrower and lender can then decide the terms and conditions of the loan contract mutually.

c) Credit finance companies

These include non-banking financial institutions offering easy loans anytime, anywhere. The loan process is 100% paperless and online. The loan amounts start from as low as Rs. 5,000 and go up to Rs. 50,000.

4. Loan against securities

This is the best option if you are looking to save on high EMIs. In this type of secured loan, you can keep your assets such as mutual funds, fixed deposits, shares, etc. as security and take a loan against it. Such loans carry a low-interest rate. However, in the case of defaults, banks can exercise their right to sell your asset and clear the outstanding loan amount from the proceedings. It is advisable to clarify the consequences of not paying an EMI on time.

5. Private money lenders

Local market lenders also lend money to individuals. However, interest rates from such lenders are sky-rocketing compared to commercial banks. Also, it can be challenging to distinguish unethical lenders from genuine ones. So, it is advisable to use this option only as a last resort and exercise extreme caution.

If you wish to apply for a low salary personal loan, you can check out the personal loan from NBFCs. They offers low interest rate on personal loan and involves lesser documentation. You can obtain collateral-free loans up to Rs. 25 lakhs with flexible repayment duration between 12 months and 60 months. To know more about the personal loan eligibility and the documentation requirements,


Personal loans are one of the best financial instruments to overcome a monetary crisis. It is possible to obtain a personal loan even if your salary income is low. You can choose from multiple options, from commercial and co-operative banks to cash loans, and private money lenders. You can even obtain a loan against securities like gold, shares, mutual fund and more.
goodideazs, LLC is not affiliated with the authors of this post nor is it responsible for its content, the accuracy and authenticity of which should be independently verified.