During the financial crisis that the nation has been experiencing for several years now, more and more people have been finding themselves unable to pay their bills. Mortgage payments, car payments and, for business owners, payroll have all become increasingly harder to pay. As a result, many people have been turning to short-term loans, revolving lines of credit, a loan consolidation to assist them financially. For those with bad credit, however, securing a loan may seem impossible. Fortunately, though, even someone with bad credit can receive a $10,000 loan by following a few easy rules and becoming familiar with all possible visit options in order to decide what the best move will be.
What to Do when Faced with the Need for a Large Loan
Nowadays, it comes to no surprise that many people, especially business owners, are in need of loans in large amounts of $10,000 or even higher. Though this is understandable, if you are one of these many people, it’s important for you to step back and carefully think about why exactly you need a loan in this amount and how you plan on paying it back. If you are spending significantly more per year than you are making, or if you are currently unemployed, it is probably a good idea to not borrow any more money to avoid sinking deeper into debt. Ideally, the only type of person who should be taking out a very large loan is someone in transition. If you were recently offered employment but will not begin your new job for a few months, a large loan may be necessary to keep up with your expenses until you start working. Otherwise, those considering taking out a loan of $10,000 or more should probably focus on managing their debt rather than creating more.
With that in mind, even once you’ve decided that securing a large loan is in your best interest, it is highly recommended that you eliminate some of your more substantial expenses and payments. For instance, it may be smart to post your auto lease online so someone else can take it over. A lavish lifestyle and the accumulation of debt do not go hand-in-hand, so make sure to get rid of excess. Once you’ve settled on securing the loan and you feel confident that you’ll be able to pay it back, the following are potential options open to you:
Signature loans are exactly what they sound like: loans secured by a signature. Designed for those with excellent credit, securing a signature loan will typically require a steady job and relatively high credit score. Also, they tend to carry high interest rates of 11% or more. For those with bad credit, a signature loan is probably not your best bet.
If you have a car that has been paid off, an auto loan may be your best option if you don’t have exceptional credit. As long as your car currently books for over $10,000, using your car as collateral for the $10,000 loan is very possible.
Home Equity/Mortgage Loans
If your home currently carries equity or if it has been paid off altogether, it will probably be rather easy to secure an equity loan or a mortgage for the money. If you have bad credit, it would be a smart idea to save up a good down payment, and eventually, it is important to refinance as soon as possible to avoid massive spending on excessive interest rates.
If the above types of loans don’t appear to be smart options for you, you may want to consider private loans. Although private loans are not the easiest ones to secure, you can start by turning to family members, who will probably loan to you even if you have poor credit. Though this may sound somewhat embarrassing, it will be worth it in the end. As long as you take the responsibility to get rid of other excessive expenses and be proactive in getting back on track financially, family members will see that you are serious in paying them back.
Oftentimes, when people refer to personal loans, they are talking about signature loans. As mentioned, it is difficult to secure these loans with bad credit because you are viewed as high-risk to the banks. In order to get a personal loan with bad credit, you will need to find a cosigner who can use their credit to help you secure the loan. The best people to ask to cosign with you are family members, friends, and spouses.
Even with a steady job, the size of your income needs to be sufficient to cover the monthly repayments. Getting a large unsecured loan approved, for those with poor credit especially, can be next to impossible if there is not enough being earned.
Finally, a lack of clear purpose can be enough to turn the lenders off. This is because lenders are not interested in financing a lifestyle. They want to know that their loan is being used responsibly. A $50,000 personal loan with poor credit without security can be used constructively in many ways, not least in consolidating existing debts.
Getting A Cosigner
The difficulties in getting unsecured loans is that the lender has only the income of the applicant, and their word, to rely on. This can be insufficient in the case of a $50,000 unsecured poor credit financial analysis blog personal loan for bad credit borrowers, where loan size and applicant reputation are both concerns.
By getting a cosigner to effectively guarantee the loan, this problem can be by-passed. A cosigner is legally committed to make repayments when the borrower is unable to. Safe in this knowledge, the lender is more confident of the chances of getting their money back. So, it is easier to get the unsecured loan approved for those with poor credit.