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$25,000 Unsecured Personal Loans: Some Issues to Consider

April 23, 2012 | Comments: 0 | Views: 178

It is only natural that applying for $25,000 unsecured personal loans is not so simple that approval is guaranteed. There are too many conditions, criteria, ifs and buts that effect the loan assessment process for anyone to be sure that they will get the green light. This is why proper preparation is so important.

The key issue with these kinds of loans is that there is no specific purpose for them. In reality, large unsecured loans for personal use can be used for anything, from paying off existing debts to taking a European vacation. Once the fund is approved and the money is deposited into the bank account, the borrower can do as he or she pleases.

Of course, there is also the problem of having no security with the loan. That is to say no collateral from which the lender can get some compensation should the borrower fail to keep up with their payments. Which ever way it is looked at, personal loan approval with no security is risky business for the lender.

There are other issues to consider too, but with some careful planning, strategizing and preparation, these can be overcome. Here are some issues that should be considered.

Know Your Score

The credit score is important when it comes to working out the interest rate bracket your loan would be in, if it were to be approved. In the case of $25,000 unsecured personal loans, the rate can be quite high, making the monthly repayments higher. But if the score is low, then the interest rate is lower and the repayments more manageable.

Check your score so as to budget your actual repayments, and know what to expect. It is surprising just how inaccurate a score can be, with some of the most recent credit activity sometimes omitted. By having your score reviewed, it may be possible to qualify for large unsecured loans for personal use.

The best way to access your credit history and score is to request a credit history report online from one of the credit agencies. Once the history is known, your entitlements become clearer and strategies to secure personal loan approval with no security can be formulated.

Be Realistic

It is surprising exactly how many people are guilty of seeking loans they have no real need for. Many actually see loans as a luxury option, like applying for a third or fourth credit card. Lenders do not like to see this, so an application for a $25,000 unsecured personal loan is practically certain to be rejected.

This is why being realistic with applications is so important. A smaller amount may be all that is needed, and since a large unsecured loan for personal use is likely to be rejected, a smaller loan might be accepted.

However, providing a purpose for the loan can help, with loans to consolidate debts, pay off outstanding bills or to finance small enterprises all much more likely to secure personal loan approval with no security.

Know Your Lender

Most of us go to our local bank, where our own account is held, when we want to secure a loan of any type. There are definite advantages to this, especially when seeking a large sum in less than perfect circumstances, like a $25,000 unsecured personal loan with bad credit a factor.

But while the bank will already know the applicant well, bank policy makes it difficult to get the best loan terms. This is where going to an online lender for a large unsecured loan for personal use works best.

Online lenders tend to charge much lower interest rates and are more open to personal loan approval with no security. So the chances of success are higher.

Sarah Dinkins is a financial advisor who writes about Guaranteed Unsecured Credit Cards and100% Guaranteed Bad Credit Loans

Source: EzineArticles
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