Finding a lender willing to grant a large unsecured loan to someone with a bad credit score is not as difficult was it once was. Once, it was almost impossible, with a low score suggesting foolhardy money management and a lack of trustworthiness. The economic situation these days means that perfectly honest individuals have been plunged into difficult financial situations.
With that in mind, lenders are far less influenced by the credit score than they were were, making it possible to get approval on even a $ 25,000 personal loan with no security. Indeed, $ 25,000 is no small sum, especially when there is no security provided. But it is important to understand that this new attitude has not come at the expense of strict criteria.
The good news is that approval for unsecured personal loans is not very hard to get if the criteria is satisfied, and that meeting the criteria can be done by following three simple steps.
Check Your Own Credit Rating
Poor credit ratings may not be the final blow to a successful application, but that does not mean it should be ignored. There is more at stake than applying for a large unsecured loan. There is also the small matter of interest rates and how they are effected.
Knowing your own score provides the information necessary to set about strengthening your application, and also in recognizing what sum is feasible to apply for. For example, a credit score of 450 is considered very low, so an applicant will know they have a very poor chance of getting a $ 25,000 personal loan with no security. A score of 700 suggests a less problematic application.
If the rating is low, it is possible to seek a review and in that way improve it. Sometimes the most recent credit activity is omitted or overlooked but, once recognized, approval for unsecured personal loans become easier. Another way to improve it is to take out a series of small payday loans, repaying them in full quickly.
Keep it Real
Once the credit score has been confirmed, and its accuracy is accepted, an applicant can set about strategizing how to secure the loan they need. But sometimes the reality of the situation dictates that a large unsecured loan is unlikely to be approved. It is essential that applications for feasible sums of money are submitted: anything too large will be rejected.
This is not a matter of interest rates and how they effect a repayment amount, but has more to do with income and how much is free to commit to repaying the loan. If an applicant has little left over each month after paying numerous existing debts, a $ 25,000 personal loan, with no security to mention, may be seen as too much of a risk.
Knowing what can be afforded is just a matter of budgeting accurately. Then, the right strategy can be formulated. For example, it might be possible to get approval for unsecured personal loans of $ 10,000 and then $ 15,000 concurrently. That way, the first loan can be used to clear some existing debts, and when it is repaid, the second loan can be used to finish the job.
Choose the Right Lender
Experts agree that the worst step to take is agree the first large unsecured loan deal offered by a lender. It is far better to shop around and look at what is really on offer, because a $ 25,000 personal loan with no security can be available with different interest rates and different repayments schedules, depending on the lender.
Online lenders tend to provide approval for unsecured personal loans with better terms than traditional lenders, but be sure to check any online companies on the Better Business Bureau website to make sure they are legitimate.