For borrowers with bad credit, the chances of getting a green light for a $25,000 unsecured personal loan are expected to be nil. The loan review process is strict, and applicants with poor credit histories are carefully screened. But with careful preparation, an application can be strong enough to be approved.

The strength of a loan application is based on only a few points: the affordability of the loan; the applicant’s debt-to-income ratio; and the specific purpose of the loan. The problem with looking for large unsecured loans is that lenders fear that the funds will be wasted and not used responsibly.

If the $25,000 will be used to pay off some existing debt, rather than finance a weekend in Las Vegas, then they are more open to the idea of ​​approving the bad credit loan. And with careful planning, the other issues can be addressed as well.

improve affordability

The first two issues are closely related, with the affordability of a loan affected by both the interest rate charged and the debt-to-income ratio that exists. When it comes to getting $25,000 unsecured personal loans, especially with bad credit scores, it takes a bit of effort to ensure both stay in order.

Borrowers with bad credit are generally charged higher interest rates due to the higher perceived risk accepted by lenders. And with large unsecured loans that require larger monthly repayment amounts anyway, the total repayments can be significant. With the ratio stipulating that a maximum of 40% of income be used for debt repayment, the sum often pushes the total figure over the limit.

But both can be improved with small or large consolidation loans. With these funds, debts can be paid off, and with each debt paid off, your credit rating improves. This in turn means that the interest rate falls. And, with each debt eliminated, your debt-to-income ratio also improves, making bad credit loan approvals more likely.

make realistic apps

Even with the efforts made to strengthen a loan application, rejection can still be the result. Sometimes the problem is that applicants don’t realize the reality of their position. What seems affordable to them on paper is not convincing enough to lenders. With no collateral offered, this is especially true with a $25,000 unsecured personal loan.

The best way to avoid this problem is to be realistic with the amount of money sought. For example, if $20,000 is needed and is easily affordable, why ask for $25,000? And if you need $25,000, consider splitting the sum into 2-3 smaller loan requests: $10,000, $10,000, and $5,000. A large unsecured loan can be turned down, but 3 successive small ones are more acceptable.

And remember, with the specific purpose of the loan detailed in the application, the probability of approval of a bad credit unsecured personal loan is much higher.

Choose your lender wisely

Finally, when looking for a $25,000 unsecured personal loan, a key factor is choosing which lender to apply to. The best terms are available online, and after a search on a comparison site, the best options that match your preferences can be found in seconds.

But there are security risks in getting loans online, and you need to check the reputation of lenders through the BBB website or Verify1st.com. For this reason, it may be worth talking to traditional family lenders with the potential to get a large unsecured loan with high acceptable terms when they already know your background and character.

Of course, it’s hard to beat the terms of online lenders, who are more open to approving bad credit personal loans. But ignoring any option would not be a wise move.