Having bad credit generally means getting approval on a personal loan is practically impossible. That fact that the required loan may be large, makes the task more unlikely, while the whole process is further complicated by the fact that the loan might be unsecured. What chance then of getting a large loan with no security to speak of, like a $50,000 unsecured loan.
These times of economic difficulties have changed the rules a little, particularly in favor of the applicant who has a less than impressive credit history. Many lenders have relaxed their policies to reflect the realities of the market place, so large loans approved with no security is not as uncommon as they might have been in the past.
While guaranteed unsecured loan approval has never really existed, the chances of approval have improved in certain cases, despite the specter of low credit ratings hanging over the applicant. The fact is that many people with previously good credit ratings have suffered financial hits that have left them struggling.
Why Bad Credit Does Not Mean No
Even being unemployed for a short period of time can have very damaging ramifications, putting an individual far behind in their loan repayments. By all accounts, this is a matter of unfortunate circumstances rather than any irresponsible attitude towards money, so a $50,000 unsecured loan might still be possible.
The fact is that the whole credit scoring system was devised to root out those who borrow and run, rather than meet their obligations. Previously, it was difficult for lenders to know if they could trust the borrower, but with a credit history - and appropriate score - available, they can now make a more accurate assessment.
Applicants too can more accurately assess if they can get large loans approved with no security. They can then fine tune their application accordingly to increase their chances and get as close to a guaranteed unsecured loan approval as possible.
Why Secured Loans are Preferred
Of course, getting approval on a $50,000 secured loan is always less complicated than on a $50,000 unsecured loan, and understandably so. Secured loans include collateral that the lender can take possession of should the borrower default on their loan agreement. So, while it might not be the preferred outcome, the lender at least can get their investment back.
Unsecured loans, meanwhile, offer nothing more than the promise that repayments will be made. For this reason, getting large loans approved with no security requires a more convincing application. Therefore, having all of the elements of an application in order can virtually - though not actually - ensure a guaranteed unsecured loan approval.
Important Aspects of the Application
Firstly, any application needs to be within budget. There is always the temptation to seek a $50,000 unsecured loan when a $30,000 loan is all that is needed. A lender is never willing to provide more than is really necessary, since the larger the loan, the larger the monthly repayments, and therefore, the higher the risk of defaulting.
Showing that efforts have been made to improve credit scores is also good when seeking to have large loans approved with no security, while a detailed plan of what the funds would be used to help build confidence. Having all of the necessary paperwork in order is another key aspect that can help towards a guaranteed unsecured loan approval.
Finally, make sure that the lender is properly accredited. It is not difficult to find lenders who will grant a loan, even a $50,000 unsecured loan, but there are penalties should repayments be delayed or missed. Amongst some unscrupulous lenders, these penalties can be crippling. So, check with the Better Business Bureau to ensure the reputation of a lender holds up.
Hilary Bowman is the author of this article. She works successfully as a financial advisor with years of expertise on Military Loans for Bad Credit. Hilary publishes informative articles about Bad Credit Loans and other financial topics at FastGuaranteedLoans.com
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