Assuming that bad credit means you are unlikely to be approved for a $10,000 personal loan with bad credit would be a mistake. The truth is that lenders need to lend in order to make a profit, and they are happy to give the green light as long as repayment can be assured. This means that when everything is in order, any application can be successful.
In reality, loans given without collateral are not as easy to obtain as loans that come with some kind of security. But getting loan approval depends on more than a bad credit rating and collateral. Other factors affecting an application can vary, but one of them is the purpose of the loan.
Of course, this isn’t the first factor people think of, but when the specific purpose of the loan is provided, lenders are able to more accurately assess the likelihood of timely, complete repayment of a large unsecured loan.
importance of purpose
Lenders like to know that the money they lend is being put to good use, and not wasted. After all, reliable people do sensible things. For example, someone who can be trusted to make timely repayments is unlikely to take out a $10,000 personal loan with bad credit and then go straight to Las Vegas.
Of course, it is not difficult to identify the purpose of the loan while taking an auto loan or a home loan. But the purpose of other loans is more open to interpretation. By stating a specific objective, securing loan approval becomes slightly more doable.
If the objective is to consolidate existing loans then the lender will be affected. But taking a huge personal loan to go on a vacation is not a good idea. Bad credit needs to be taken seriously, and wasting money is never a good move.
how purpose is proved
In an application for a $10,000 personal loan with bad credit it is fine to state that the purpose of the loan is constructive, but lenders expect some sort of confirmation. This means providing as much detail as possible in an application, not just one short detail and leaving the rest to chance.
With online forms, it’s easy to just tick boxes and type in text when requested. But the more details the better, while securing loan approval on the card. For example, if consolidating loan debts, state which debt and how much the balance should be. Provide a breakdown that leaves no questions.
It’s also a good idea to get in direct contact with the lender, either via email or even over the phone. The advantage of this technique is that the lender will view the applicant as more than just a number, and the amount of interest shown in the application for a large unsecured loan will be viewed in a positive light.
practical credit utilization
While the purpose of a loan should always be constructive, there are practical uses for obtaining a $10,000 personal loan, with bad credit management only one of them. Agreed that such an amount can solve the debt problem, but remember that it is necessary to repay the loan. For this, it is necessary that the loan is confirmed in terms of practical use.
Certainly, the realities of the financial situation have to be taken into account. Hence, taking advice from a loan expert is also a worthwhile step. Securing a loan approval would be great, but not when the extra debt causes more financial trouble than anything else. Once the applicant is clear as to why a large unsecured loan is needed, it becomes easier to persuade the lender.