Unsecured personal loans are becoming increasingly popular as a means to secure cash to finance home improvement projects, new business ventures or vacation property purchases. The advantage to using an unsecured loan is that, the loan is not subject to an asset that you own, for example, your home. When you take out a home equity loan or home equity line of credit (HELOC), the lender offers cash secured against your home. In other words, your house is collateral for the loan. If you default on the loan, the lender may be able to sell your house, to recover the value of the loan. With an unsecured loan, your credit history is your security. The lender is trusting you to repay the loan, based on your past credit history.
How much money can I get?
Financing is typically offered in amounts of $1,000 to $30,000. If you need more than that, for example, $50,000 to $100,000, you may find it difficult to get an unsecured loan. You will most likely need a loan that is secured against your home. It should be noted that, most lenders will only provide a secured loan, of this amount to a homeowner, who has a great deal of equity in their home. You cannot borrow more than the equity in your home. The rule is typically 60% loan to value (LTV). This means that you can borrow up to 60% of the equity in your home. If you have $100,000 worth of equity in your home, you can get a loan up to $60,000.
Another source for consumers, who need large loan amounts is to use the services of a hard-money lender. These lenders offer fast loans at high interest rates. The loan must be repaid in a short period of time.
What about my credit history?
Credit history is always an important factor, when securing a loan, whether it is an unsecured loan, home purchase or automobile loan. The fact is, your credit history is an indication of your likeliness to repay your loan, on time and in full. A person looking for an unsecured loan is most likely to be successful, if they have a credit score of 720 or higher. Some lenders will only lend to consumers with excellent credit and will not consider applicants with average or poor credit.
Will I be able to get a loan, if I have average or poor credit?
Yes. Some lenders service consumers, with varying credit scores - great, average or poor. The key to successfully navigating the process and getting the cash you need, is to research your options and explore various lending institutions and networks. For example, your local bank or credit union might not be willing to give you a loan, but another lender will work with you to secure a loan.
1. Select one or two lenders, who work with various credit types.
2. Determine the lender's loan application and approval criteria. Read everything carefully and ensure that you meet all qualification requirements.
3. Understand the loan repayment requirements. When will you need to repay the loan? How many months is your repayment period - 36, 48 or 60 months?
4. Lastly, complete your loan application truthfully and thoroughly. Your goal is to ensure that the loan officer has no questions regarding your application.
Get a $20,000 to $25,000 unsecured loan at http://www.pioneerlenders.com/. Consumers with good, average or poor credit can still get a loan.
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