Seeking $10,000 Loans With Bad Credit: Loan Types and Securing Approval
There is no guarantee of getting a $10,000 loan with bad credit, but bad credit borrowers do have loan options worth considering. And some of them are more likely to be approved than others.
How can this be? Well, the bottom line is that bad credit scores are not the basis of any loan rejection. More significant influence is exerted by employment status and the debt-to-income ratio. Once these aspects are in good order, and the application is strong enough, it is even possible to get large loan approval with no security at all.
Still, there are conditions associated with all loan products, with lenders requiring some kind of assurance that their investment will not be lost altogether. But what are the loan options worth considering, and what can be done to build a large personal loan strong enough to have them approved?
1. Home Equity Loans
Loan applications that come with some sort of security are very likely to be approved, and of the various forms of security, the most valuable is home equity. In fact, as long as the equity on the property is large enough, the loan sum secured can be effectively anything and a $10,000 loan with bad credit is as likely to be approved as a $100,000 loan.
The reason for the strength of equity as security is that property never depreciates in value. Unlike a car, for example, which falls in value over the years, a home is always a desirable object. So, while securing approval with no security is never guaranteed, equity changes the situation completely.
As a result of offering home equity, the interest rate charged on even a large personal loan will fall dramatically – after all, the risk element is essentially removed.
2. Private Lender Loans
There are two types of private loan sources that can be approached when looking for a $10,000 loan with bad credit. These are either a private lending firm, or your own family. By and large, the most popular is the family loan, where interest rates are usually not charged, and approval is guaranteed as long as the family member has $10,000 to hand.
However, the second option has its own advantages, though it will require some preparation to improve on the chances of securing approval, especially approval with no security. The good news is that, generally, private lenders are experts in bad credit lending, so the likelihood of getting a green light is far greater than it would be with traditional lenders.
What is more, the terms are more manageable, with the lifetime of the loan extended to ensure monthly repayments are kept as low as possible. This is a very important factor when a bad credit borrower is seeking a large personal loan.
Personal Bank Loans
Finally, getting a personal loan from a bank is the most logical option, but it would not be accurate to say it is the most cost-effective option. Traditional banks are known to have strict lending policies, and so the chances of getting a $10,000 loan with bad credit are pretty slim.
When applying for a large loan, the chances of approval with no security are extremely low, but should the aspects of employment and debt-to-income ratio be strong, then approval is possible. Typically, lenders will only consider applicants who have been in full-time employment for at least 6 months, and without security the loan limits may be no more than $5,000.
This creates a problem when seeking large personal loans but the best way around this problem is to find a cosigner that will act as a guarantor, ensuring the monthly repayments are made without fail.
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ABOUT THE AUTHOR
Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loans for 5000 and Bad Credit Student Loans Guaranteed. For more information about his services please visit him at http://www.accessmyloan.com