It was not that long ago when you could apply for a large loan and get it no matter what your credit score. Back then many of us would borrow without thinking about what consequences would befall us if we had bad credit scores. But that all crashed down around us and things spiraled out of control. Everything crashed from the stock market to the real estate market. Credit rating points melted away and even the people with fantastic credit ratings found out that they were now in deep financial trouble. Bankruptcy rates skyrocketed as there was no exit in sight.
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We have to take the opportunity to learn from the past or we risk reliving it in the future. Even so, many of us became financial victims before we had the opportunity to learn how important our credit score was and how much we needed to take it into account before we make any large purchases. Perhaps you are one of these victims who got here today without doing much wrong. Perhaps you made bad financial decisions and ended up here because of yourself. Either way, are you thinking that it is no longer possible to get a large unsecured personal loan with your current credit score? If you think so, you are completely wrong. There are so many places to go that are lending sums up to $25,000. All you need is to find them and see if your circumstances will get you that loan. There are basically four steps you should check to see if it is possible for you to obtain such a loan.
1) Credit Check
Do not assume that you actually deserve the credit score you currently have or the score you think you have. You must face your present situation head on. Before you start looking for lenders, first know how deep your financial hole is. Prior to 2008, a credit score around 650 would get you a large unsecured loan. Now you need to have a credit score higher than 730 to obtain the same loan. By studying your credit report, you can show potential lenders that you know where your financial problems are and that you are working on improving the holes in your credit scores. Lenders are more likely to lend money to you if you show them that you are actively engaged in improving your financial situation.
2) Budget Check
Just because you have a credit score above 730 does not mean you can afford any more debt. You have to be able to afford making your payments on any loan regardless of your credit score. The last thing you need is to default on a loan if you already have bad credit. Work the numbers and check your budget first. Make sure you have a realistic budget. Not only should you plan what your income will be over the next eighteen months, but also what your expenses will be. Cut any fat out of your budget so that it is freed up to repay the loan. You may have to forgo some luxuries for a while. Be aware of what they are and if you can truly live without them for a while. When you meet with the lender, bring along your budget and your worksheets. Show him how you have looked at your finances and that you are now in control of them.
3) Reality Check
As already mentioned the economy is treading water and seems to be gasping for air. This is not the time to take out a large loan if it is not absolutely necessary. Search your soul and make sure that the reasons you need this loan are real. You must be completely honest with yourself on this. If you are going to use the money for a small business, prepare a business plan showing how you will repay the loan. Bring the business plan with you when you meet with the lender. If you are trying to consolidate bills, such as medical bills or credit card debt, make a list of all the outstanding debt and how much you will need to pay it down. Then you will be able to determine if the money you save by making one payment will be affordable and will help you over the long run.
4) Lender Check
A $20,000 to $25,000 loan is large. The payments will be large. The length of the loan will be large. Do not just go with the first lender your internet search engine lists. You must be absolutely confident that you are working with a legitimate lender. Check them out with the Better Business Bureau. Do internet searches on the lender and see what is being said about them. Check out 3 to 5 lenders, at the minimum. Find your best deal. Comparison shop. Following these steps you will be ready to meet with the lender and fill out the application. You can find an unsecured personal loan for $20,000 to $25,000. You just have to be prepared.
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