Friday, June 13, 2014

Get a $20,000 Unsecured Loan Now, Even With Bad Credit

Convincing lenders to grant loans to bad credit borrowers is very difficult. Caution should not be mistaken for unwillingness to lend. Every problem has a solution. It is possible that your bad credit will not stop you from getting a $20,000 unsecured loan.

Loan applications do not stop in their tracks simply because of a poor credit score. Believing this would be a major mistake. There is a golden secret to getting the loan approval you are seeking: convince the lender that the loan will be repaid in full. The best way to do this is to prove that you can comfortably meet the repayments.

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A large unsecured loan is tough to get even with perfect credit scores. So you will have to follow a few steps to help your cause.

What Really Matters?

You have to carefully plan your application so that it is convincing. It has to convince the lender to loan you $20,000 unsecured. Your credit score will never be the reason for the application to fail. Other factors influence the decision much more than credit scores.

In the long run, employment and debt-to-income ratio are the key factors that will make or break your application. You should have a full-time job that you have held for at least six months. The income from that job needs to be high enough to cover the repayments. If you are self-employed, you will need to supply income tax statements showing that you generate enough income to cover the repayments on a monthly basis.

The debt-to-income ratio takes your monthly income and compares it to your monthly expenses. The strict limit applied by lenders is 40 percent. This means that any excess income has to be high enough to support a repayment of 40 percent. For example, for every $100 of excess income (income left after paying expenses, you can afford $40 of loan repayment.

Making Your Application More Secure

Even with a strong debt-to-income ratio, it may not be enough to secure the loan. If you can add security, you change the unsecured loan to a secured loan. Secured loans are easy to approve. If the repayment is not made, the security is taken to pay off the loan.

When you think about security, do not overlook that security is not just assets. Security can be a cosigner. Your cosigner guarantees repayment in the event that you fail to make monthly repayments. If a cosigner is accepted by the lender, the chances of default fall to almost zero. This improves chances of approval to almost 100 percent.

Seek Out the Best Lender

After doing all the preparation to submit the strongest application, it is foolish to apply to the wrong lender. It is very likely that the traditional lenders will certainly not grant an unsecured $20,000 loan to a person with bad credit.

There are plenty of online lenders who will not only take on the risk of granting you the unsecured loan but are actually in the business to specifically do this. They accept the risk because their business model allows them to.

There are also private lending firms that specialize in unsecured loans to people with bad credit. They also accept the risk of granting these loans.

Both the private lending firm and the online lender have structured their loan offerings to be affordable. This makes the loan packages worthwhile to both you and them. Since these packages were designed specifically toward people with bad credit, they are easier to get approved.

Make sure you check out the lender before signing. Not all lenders are legitimate and some are risky to do business with.

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