The effect of the economic crises over the past few years is by no means dissipating. The public is still reeling from the blow they have had on their credit reputations, and lenders remain as cautious as ever. So, when a bad credit applicant applies for a $10,000 unsecured personal loan, the chances of approval are surely slim.
But that is not to say that getting such a large loan without the benefit of any form of security is completely impossible. There are always ways around such difficulties, though it may require making some compromises. Loan approval without collateral is going to cost more.
There is always a preference for secured loans, where the lender has some item of value from which to take compensation should the borrower default on the agreement. But unsecured personal loans are on offer to those who meet the set criteria and satisfy the conditions of affordability.
Loan Options To Consider Carefully
The whole idea behind offering unsecured loans is that those who do not have possessions of great value, or even are unwilling to risk something they have of value, can access funds. Normally, such loans are small, between $500 and $5,000, but it is possible to get a $10,000 unsecured personal loan, given the right circumstance.
The issue is uncomplicated when the applicant has a good credit history, but there is great scrutiny of applications from bad credit applicants. This is understandable, but it means that choosing the right loan product is important too. For example, since approval without collateral is easier for smaller loan sums, be sure that the amount applied for is realistic. If $7,000 is needed, do not apply for $10,000.
Also, consider splitting the unsecured personal loan into two successive loans of $5,000, for example. It may also be worth considering taking out a series of small payday loans, and repaying over a short period - especially when dealing with a financial emergency.
The chief problem with an unsecured loan is that if the borrower fails to meet their obligation, it is the lender who loses out. This means that convincing the lender their investment is safe is at the core of securing a $10,000 unsecured personal loan.
To help in establishing the assurance needed, it may be a good idea to include a consigner in the agreement. The cosigner promises to make the repayments in place of the borrower should the situation dictate. This means payments are guaranteed, and so the risk is less. As a result, granting approval without collateral is less of an issue.
Alternatively, seek an unsecured personal loan with a longer repayment term - perhaps 7 years instead of 5, for example. This lowers the size of the monthly repayments, which in turn greatly reduces the likelihood of default.
Where To Look
When it comes to securing a loan deal that is affordable, there are some terms that should be sought. As can be expected, repayments on a $10,000 unsecured personal loan should be low enough to ensure affordability, but interest rates need to be kept low too.
By applying to an online lender, the terms of the loan deal should be the most affordable possible. This is because the interest rates charged are typically lower than any traditional lender would charge. Securing approval without collateral is also more probable because they are expert bad credit lenders.
However, remember to check the reputation of any likely lenders before agreeing an unsecured personal loan contract. Check the BBB website to find out if they are trustworthy.