Can I Get A Payday Loan If I Have A Low Income?

Yes, it is possible to get a payday loan if you have a low income. You may just be offered less favorable loan terms such as a smaller loan amount or a higher interest rate. According to the LSC, in 2022 approximately 50 million Americans had household incomes below 125% of the poverty threshold which…


Yes, it is possible to get a payday loan if you have a low income. You may just be offered less favorable loan terms such as a smaller loan amount or a higher interest rate.

According to the LSC, in 2022 approximately 50 million Americans had household incomes below 125% of the poverty threshold which corresponds to an annual income of less than $17,500 per year. With this in mind, Pheabs reveals how those with a low income can try to secure a payday loan, as well as other alternatives that can be considered.


What Is A Payday Loan?


A payday loan offers a short term form of borrowing that can be used to pay for unexpected costs to help tide you over until you receive your next paycheck on your upcoming pay day. Reasons you may need to borrow money this way includes due to:


  • Emergency bills
  • Medical costs
  • Vet payments
  • Dental fees
  • House repairs
  • Car fixes
  • Rent payments
  • Utility bills
  • Funeral costs


These short term loans are typically repaid back in 2 to 4 weeks via automatic withdrawals from your bank account. Repayment dates will be agreed upon with your lender in your loan contract.

Payday loans can be taken out in 37 of the 50 US states where they are legal. This includes states such as Alabama, Colorado, Florida, Ohio, Oregon, Tennessee, Texas, Washington and Wyoming to name a few.

To qualify for a payday loan, applicants need to be US citizens aged over 18 years old, with a regular income and a live checking account for the funds to be deposited into.



What Is the Minimum Income Needed To Qualify For A Payday Loan?


The minimum income needed to qualify for a payday loan varies between lenders. Typically, borrowers will need to earn around $500 to $800 per month to be eligible for a loan as this will reassure the lender that they will be able to meet the repayments on time.

Lenders will typically require a proof of income when you apply for a loan. For instance, you can show recent pay stubs, your W-2 or your tax returns if you are self-employed. It is definitely worth showing any extra forms of income such as child support, alimony, pension money or income from a side hustle, however big or small, as this will all be factored into your overall income and the likelihood of you being able to pay back the loan, plus interest.

Those who earn less than this may still be able to get a loan today, however it may be with much less favorable terms. For instance, they may wish to borrow $600 but only be given $300. Or the loan term may be shorter than they would prefer or the interest rates may be higher.

It is essential to make sure that you will be able to comfortably afford the repayments before applying for a payday loan, especially if the interest fees are more costly due to a low income. If you fail to repay back your loan on time you could incur extra fees and interest, as well as a negative damage to your credit score which could make it more difficult to borrow money or apply for credit in the future.


Can I Be Denied A Payday Loan Due To Low Income?


It is possible to be denied a payday loan due to a low salary. However, whilst it can be a challenge it is achievable to secure a loan. Income is not the only factor considered when being approved for a payday loan so if for instance you have an excellent credit score, then this may be considered in your favor. 

There are also other options you can consider to increase your chances of being approved for a payday loan. For instance, requesting to borrow a small amount should stand you in better stead for being successful. This is because there will be less risk involved for the lender due to the smaller repayments so they may be more likely to accept your loan request.

Some lenders will allow you to add a co-signer to your loan, which gives someone else the legal obligation to repay back your loan if you fail to meet repayments. The co-signer, typically a family member or friend, will have their income and credit score assessed just like you would so it would be sensible to choose a close person with a good financial record and strong salary.


What To Do If You Were Denied A Payday Loan Due To Low Income?


If you are denied borrowed money due to a low income, then there are many alternatives to a payday loan that you can consider. You could look into low interest credit cards, ideally with a 0% introductory APR for purchases or balance transfers. Just bare in mind that there can be high costs or interest rates associated with credit cards so make sure you read the terms and conditions carefully before signing up.

Alternatively you could consider secure loans which tie assets such as your vehicle or property to the loan. In this case, if you fail to meet repayments the lender would not need to chase money from you as they could take away your possession. As a result the requirements tend to be less strict and you may have an easier time getting the money that you need. However, it is essential to be able to afford to repay back the payday loan as otherwise you could risk losing your asset.

You could also borrow money from family or friends. This could certainly be beneficial as you would not have to worry about any interest payments or fees. Just make sure that you create a formal agreement with them to avoid any strains to your relationship.

Another way to secure fast cash could be increasing your income if possible. Start a side hustle, negotiate a salary increase or even possibly look for a new job with a higher wage. Selling unwanted items you no longer need via online platforms such as eBay or a garage sale is another way to make quick money.


Last Updated on March 29, 2023 by Justine Gray

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