There are some tricks to overcoming the issues having a poor credit history can create when applying for a loan. Even when seeking a $50,000 unsecured personal loan for bad credit management purposes, lenders can be hesitant – though with such a large figure that is understandable.
We know that, in this case, the purpose of the funds is to clear up debt and address the bad credit issue that the borrower has, but no lender is willing to grant large loan approval on this basis alone. There needs to be something more substantial to the loan application.
So, securing such a large unsecured personal loan usually comes down to knowing the best way around the problem. What is important to know is that the credit score is not the issue to worry about – there are others to keep in mind.
Overlooking The Credit Score
It might seem strange that lenders would pay such little attention to the credit score an applicant has, but a credit score has a very limited influence over a loan application anyway. Still, when seeking a $50,000 unsecured personal loan for bad credit management, there is already an understanding what the funds will be used for.
The only area in which the credit score has any say is the in the interest rate that the lender charges. It is a set structure, with certain scores matched by certain interest rates. For example, an applicant with a good score of 700 may be charged 7%; of 600 perhaps 9%; and of 500 perhaps 11%. So, the chances of securing large loan approval are affected in that sense.
However, affordability is the key to a successful application, and as long as the repayments can be made without much financial strain, then getting an unsecured personal loan – even a large one – can be practically assured.
The Term Can Make The Difference
When affordability is hard to establish, there is little or no chance of securing a large loan, like a $50,000 unsecured personal loan – for bad credit borrowers particularly. However there are ways to solve the problem, if the lender is willing to agree to it.
The term of a loan dictates the size of the monthly repayments, with shorter term loans requiring much higher payments than those with longer terms. So, if the term of the loan can be extended, then the affordability can be increased. Once that is done, securing large loan approval becomes more likely.
When seeking a loan as large as $50,000, extending the term from 5 years to 10 years can see the monthly repayments fall from $875 to just $435. Even for bad credit borrowers seeking an unsecured personal loan, that is a highly affordable sum.
Your Lender Choice Is Important
Never forget that lenders can have very different lending policies, so what is rejected by one may be approved by another. When applying for a $50,000 unsecured personal loan for bad credit management, for example, some lenders choose to see the cash being lent, while others pay attention to the purpose the cash will be used for.
This means that spending time researching which lender to apply to can be worthwhile. Generally speaking, online lenders are the most likely to accommodate the needs of bad credit borrowers, and are most likely to grant them large loan approval.
However, be careful about your choice too, and check out the reputation of the lender before committing to any loan deal with them. An unsecured personal loan can be a very expensive debt with the wrong lender. The BBB website should reveal details on how trustworthy a particular lender is.