It is one of the ironies of today that the time we need to get a loan is often the time we cannot get approved. Poor credit ratings prevent us from getting the loan we need to pay down debt to improve our credit ratings.
One of the major advantages of getting a loan to consolidate debts is that muliple debt payments are replaced by one payment. This single monthly bill is more manageable than the multiple payments that it has replaced. Lenders who are already overly hesitant about granting large loans are even more unlikely to approve loans when there is no security involved.
Yet you do have options. Putting together a strong enough application with everything filled out propery will help you get the loan you are seeking. The following are some simple steps that will help you get approved for an unsecured loan to consolidate your debt.
What are Your Lender Options?
Begin with identifying the best lender for you. Forget about going to traditional lenders. Most have a proven track record of rejecting bad credit applications. Your best bet are to go elsewhere for a $10,000 loan.
Online lenders have popped up all over the internet during the last few years. They are in the business of bad credit lending. This means that they are generally the most accommodating.
In addition, loan comparison sites now exist that allow you to compare the best deals. Remember, they are sponsored by the lenders they use for comparison and so they may not have the best lender for you on their list.
Start with a shortlist of lenders before making any direct contact with them. Then check out the details of their offers. Look for hidden charges or possibly punishing late fees. You do not want to start cheap only to end up expensive.
Look for a Cosigner
Lenders are evaluating you to see if you can pay back the loan. If you have bad credit and are seeking an unsecured $10,000 loan, the lender may not even look past the basic application. Remember they are evaluating the risk of you not paying them back.
A cosigner shifts the risk of the loan to the cosigner. The cosigner is guaranteeing payment in full. Without the repayment risk, the lender has no further reason to deny the loan application.
A cosigner does not have to do anything more than prove they have a good credit rating and sufficient income to cover the payment. As long as you make the monthly repayments on time, the cosigner has no further involvement in the loan.
Reputation is Critical
Your lender is evaluating whether you are trustworthy. You must do the same and make sure they are trustworthy too. It should be no surprise that unscrupulous people are found on the internet. The Better Business Bureau is a great place to check out the lender before you commit yourself. Make sure they are listed and see if they have any complaints registered against them. If the lender is not graded A or above, do not work with them. They are too risky to do business with.
After doing all this homework, the approval of the loan is based upon the strength of your application. Given sufficient proof of income and the affordability of the loan repayments, approval is likely.