Having bad credit does not mean loan approval is doomed – there are more influential factors. When seeking a $10,000 personal loan with bad credit, stating the loan purpose, for example, can prove valuable.
Assuming that bad credit means the chances of being approved for a $10,000 personal loan with bad credit is unlikely, would be a mistake. The truth is that lenders need to lend to make profits, and so long as repayments can be assured, they are happy to give the green light. What this means is that when everything is in order, any application can be successful.
In reality, loans that are granted without collateral are not as easy to get as loans that come with some kind of security. But securing loan approval depends on more things than bad credit ratings and collateral. The other factors influencing an application can vary, but one of them is the purpose of the loan.
Admittedly, this is not the first factor that people think of, but when the specific purpose of a loan is provided, lenders are able to more accurately assess the chances of the large unsecured loan being fully repaid on time.
The Significance of Purpose
Lenders like to know that the money they lend is being used properly, and not being wasted. After all, reliable people do sensible things. For example, someone that can be trusted to make repayments on time is not likely to seek 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 a loan when getting an auto loan, or home loan. But the purpose of other loans is more open to interpretation. By stating a the specific purpose, securing loan approval is made a little more possible.
If the purpose is to consolidate existing debts then the lender will be impressed. But it is not a good idea to seek a large personal loan to head on vacation with. Bad credit needs to be treated seriously, and wasting finances is never a good move.
How a Purpose is Proven
It is fine to state in an application for a $10,000 personal loan with bad credit that the purpose of the loan is a constructive one, but lenders expect some sort of corroboration. This means providing as much detail as possible in an application, and not just a short statement and leaving the rest to chance.
With online forms, it is easy to just tick the boxes and type in text where requested. But the more detail the better when securing loan approval is on the cards. For example, if the loan is to consolidate debts, state which loans and how must the balance is. Provide a breakdown that leaves no questions.
It is also a good idea to make direct contact with the lender, either through emails or even over the phone. The benefits of this technique is that the lender will see the applicant as more than just a number, and the degree of interest shown in the application for a large unsecured loan will be seen in a positive light.
Practical Loan Uses
While the purpose of a loan should always be constructive, there are practical uses to getting a $10,000 personal loan, with bad credit management just one of them. Admittedly, such a sum can solve debt problems, but remember that the loan needs to be repaid. To this end, it is essential that the loan be confirmed as having a practical use.
Certainly, the realities of the financial situation need to be taken into account. So, getting advice from a debt specialist is an worthwhile move too. Securing loan approval would be great, but not if the extra debt is set to cause financial trouble rather than anything else. Once the applicant is clear on why a large unsecured loan is needed, then it become easier to convince the lender.