Going to a traditional lender and seeking a large unsecured personal loan seems like a story of daring do at a time when banks are tightening their belts. A small loan can be difficult enough to get approval on, especially when bad credit history is a factor and no collateral is being provided. So, the chances of a large unsecured loan being given the green light seems like wishful thinking.
However, the truth is that loans that are unsecured, even large ones, are still available despite the fact that bad credit is a part of the equation. It may not be a simple case of walking into a bank and speaking kindly to the loan officer there, but it can be done.
What is essential is that the applicant understands the requirements and how they can maximize their position to get a large personal loan approved without security. There are some points that should be taken note of
Significance of Income to Debt Ratio
The first mistake that is made is to think that bad credit is the factor that takes large unsecured personal loans out of reach. While the credit rating of an applicant is certainly looked at, there are more significant aspects, such as the income to debt ratio.
The income to debt ratio refers to the percentage of an income already used up by existing debts and obligations. So, if a monthly income is $5,000 and obligations account for $3,500, that means there is a share of income available to cover any new debt. The problem is that not everyone has enough excess income, and loans that are unsecured offer the minimum of security to the lenders.
In this light, a large personal loan approved without security is only possible if the applicant has plenty of extra cash to spare. It may be less of a problem should the purpose of the loan be to consolidate debts, since the loan will clear much of the existing debt.
A large unsecured personal loan does need to be carefully budgeted for, but even if the credit history is poor, enough excess income will be viewed as favorable.
Meeting the Criteria
Of course, failing to meet the basic criteria for a loan is going to work against an applicant for any type of loan. However, by getting everything in order, the chances of successfully applying for a loan, even a loan that is unsecured, increased dramatically.
In essence, it is about getting the paperwork done. Lenders, even online lenders, will require a government issued form of identification, proof of employment, proof of residency and a social security number, if any application is to be considered seriously.
However, to improve the chances of getting a large personal loan approved without security a definite pattern of repayments is very beneficial. For example, even getting a small loan and repaying it before time goes into the credit record, improving the rating.
What this means is that even repaying a loan of just $500 can make a difference. Graduating to larger loan sums then extends the improvement, with the rating improvements also increasing. In this way, a large unsecured personal loan becomes more acceptable.
Get The Figures Right
When applying for any loan that is unsecured, it is necessary to ensure that the calculations are right. It is the only way to ensure that no problems will crop up in the future. In order to get a large personal loan approved without security it is necessary to convince the lender, not just ask. Showing clear numbers shows that careful consideration has been given to the idea.
With facts, figures, clarity of purpose and all of the documentation is order, an applicant has every chance of seeing their request for a large unsecured personal loan being approved.
Joycelyn Crawford is the author of this article. For more information about Easy Loans for Bad Credit and Easy Home Equity Loan please visit EasyLoanForYou.com
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