Only 500 dollars credit, with such a small amount, proof of income must actually be superfluous. If you are looking for a small loan of this size, you may think so. And he is supported in this belief when he finds the many loans offers on the Internet under the heading “Loan without proof of income”.
However, he will quickly notice that banks and other financial service providers understand income verification as something completely different than he himself.
And another disappointment awaits borrowers who want to take out a 500 dollar loan without proof of income. Hardly any credit institution is prepared to issue loans of such a small amount.
What does “without proof of income” mean?
“Without proof of income” never means that banks waive any evidence of their credit clients’ earnings. It does not mean that there is no income at all. Banks are obliged to carry out a credit check before lending, no matter how small. And in addition to the Credit Checker information, an appropriate review of current income is part of every credit check.
If credit institutions advertise loans without proof of income, this can mean two different facts.
Some banks understand that proof of income is only evidence of wages, salaries, civil servants’ pensions or pensions.
If these banks promise a loan without proof of income, they mean that not only permanent employees, public servants, pensioners or pensioners have a credit opportunity.
Rather, loans are also given to other groups of people who have sufficient income.
Depending on the provider, these groups of people can include the self-employed, start-ups, students with additional income, trainees, employees during the probationary period and temporary employment contracts or those receiving a parental allowance.
However, the prerequisite is always that the economic capacity (freely disposable income) is sufficient according to the guidelines of the bank in order to be able to service the loan properly.
The income that these banks do not consider
To be income in the narrower sense must, of course, be documented. Other banks actually refrain from providing evidence that shows the income earned. These credit institutions use modern technology and grant loans entirely digitally, without requesting receipts for income by uploading documents or in paper form.
The proof of income does not disappear, however, but is replaced by a so-called electronic account view. In the course of the digital application process, the applicant provides the bank with the access data for the current account.
The bank then evaluates the incoming and outgoing payments over a certain period of time, sometimes in a matter of seconds. The account movements show the amount of income and regular expenses.
A loan without proof of income never means that credit customers do not have to disclose their income.
Either the economic performance is checked using a digital procedure (e.g. account view) without using receipts.
Or the bank requests receipts either in paper form or by uploading documents, but also grants loans to people who do not have regular income from employment or pension rights.
Installment purchases are somewhat of an exception. Sometimes only the information on the income achieved without further evidence is sufficient. Or installment buyers are asked to show their credit card.
500 dollars credit: possible providers
Finding a 500 dollar loan without proof of income is not that easy. The lack of proof of income is the lesser problem.
The real problem is the low loan amount.
Very few banks are willing to issue loans below 1000 dollars. An example of this is the Good Finance Bank. However, this bank expects proof of income.
Mini loans from special providers
Under the keyword 500 dollars credit without proof of income, you will often find offers for so-called mini loans or short-term loans.
Well-known providers such as E-cash or E-Money expect, as far as can be seen, proof of income, even if the lending is largely electronic.
An exception is probably Xpresskredit, the short-term loan from Good Credit Bank. The applicants’ income situation is also checked, but concrete proof of income is probably not required.
All providers of mini loans do not only grant short-term loans to employees or civil servants.
Provided that they have sufficient income, the self-employed, pensioners, students and trainees and recipients of other income are eligible to apply.
With mini loans, there are a few hooks and eyes.
The terms are short, for new customers they usually do not exceed 30 days.
In principle, the entire loan amount, including any accrued interest, must be repaid in full at the end of the short term.
The effective annual interest rate is high. For some providers, it even significantly exceeds the interest rates that accrue for bank overdrafts.
Additional functions are a special kind of cost trap.
“500 dollar credit immediately into the account” or “500 dollar credit with immediate payment” is often the advertisement.
In fact, express payments are possible, but only for horrendous fees. The same applies to grant installment payments or extending the term.