$25,000 Unsecured Loans With Bad Credit

When a financial situation is spiraling downwards, an injection of cash is what is usually needed. The problem is that getting a large loan, like a $25,000 unsecured loan, with bad credit can be a challenge. Thankfully, the task is made a little simpler when the right approach to the application is taken.

By approach, we mean that some useful preparatory steps are taken to ensure the application made is the strongest it can be. It is important to note they cannot guarantee approvals, but they can certainly vastly improve the chances of getting approvals despite low scores. And with the right boxes ticked, then it becomes easier to access cash significant enough to make a difference.

Remember too that, since credit scores are not the principal factor in the approval process, the credit history of any application is immaterial. So, regardless of the credit history, large unsecured loans are attainable.

Factors That Are Important

There are only a few areas that applicants need to be concerned about when preparing to apply for a $25,000 unsecured loan with bad credit. The first is that a reliable source of income can be proven, and the second is that the debt-to-income ratio allows for the application to be approved.

A reliable source of income is a basic requirement, and providing proof usually means providing a Social Security Number from which lenders can get the information they need. However, sometimes they might also seek documentation like a payment slip or a bank account showing paycheck deposits. Once these are provided, it is much more likely to get an approval despite low scores.

The debt-to-income ratio relates to the amount of income used to repay the existing debts. The set limit is 40%, so if these debts are already at the level (or close to it), then getting approval on another large unsecured loan can be ruled out.

Improve Credit Rating

If there is a problem with the debt-to-income ratio, the best way to deal with it is to reduce the existing debt. This can be done by getting a small payday loan with which to pay off one or two loans, like a credit card balance, for example. It might take time for these loans to lead to the possibility of getting a $25,000 unsecured loan with bad credit.

However, with each debt cleared, more income is freed up and the credit score is improved. As a result, the debt-to-income ratio falls, thus making room to handle the required repayments on a $25,000 loan. And with the condition of the ratio satisfied, there is every chance of getting approval despite low scores.

Alternatively a consolidation loan can be taken out to clear all of the debts, and establish one loan repayment at a lower sum. This will also improve the ratio, making the chances of getting a large unsecured loan much better.

Get a Cosigner

When applying for a $25,000 unsecured loan with bad credit, the fact that no collateral is provided means that convincing lenders they will get their money back rests on income. But that is not always enough when dealing with large loan sums. A cosigner can solve that problem.

As loan guarantors, a cosigner basically promises to cover the repayments if the borrower defaults on the loan. This means the flow of payments is maintained and, with the risk of default removed, the lender can lower the interest rates. So, getting approval despite low scores becomes something of a formality.

The only catch is that a cosigner needs to have a good credit history and have an income large enough to meet the repayments consistently. This can be a major commitment when a large personal loan is involved. 

Have Yourself A Personal Financial Timeline

Since day one of working as an employee, you’ve been working hard and disciplining yourself. You got promoted and experienced increases in your salary. You’re finally at the coveted position known as “in the black”, which means you now earn more than you spend. Financial freedom is just around the corner for you. Because you actually bring in more than you bring out, you now have the chance to do something positive with your excess money, like building your pot of gold and paying off all your debts. Whether you’re planning to invest or save up, you’ll need to follow a timeline so that you would know what to do, how to do it, under a specified time. Like all timelines, here are the areas you need to focus on in order of importance. Pay off debts with high-interest

Debt in itself is not destructive at all. In fact it helps a lot of people fill in some emergency expenses or lump sum needs. What makes debt troublesome is the interest rate attached to it. As a general rule, the longer you carry debt, the more money you will end up paying. Therefore, the first step in this timeline and towards financial freedom is paying off the money you owe, especially the ones with high-interest rates. These debts are easy to locate. Simply gather all your debt, make a list, and rank them according to interest rates. With the extra money you have, pay off the debt with the highest interest, and then down the list.

Pay off other debts

Corporations and small businesses share the same policy when it comes to their liabilities; they make sure their debts, whether short-term or long-term, are paid as soon as possible. If all liabilities can be paid in a month, then by all means, pay them off. This is how you should look at personal finance as well. Debt is never a friend when it comes to handling your finances. If you have debt, do not procrastinate and pay them right away. Even if there are small or no interest rates attached to the debt, make it a priority to settle them because it helps your well-being both emotionally and mentally to know that you’re debt-free.

Create a savings account

For starters, try to set aside at least 10% of your income every time you receive a paycheck. If you’re already doing that, try to increase the percentage that you save. Ten percent may seem small, but five years from now you’ll be surprised at how huge your savings account would be if you practiced this step strictly. Further, the amount you accumulated over the years can be used to build an investment portfolio. To some people, savings and a retirement plan just don’t cut it. If you’re one of those people, then work your way towards having an investment portfolio to increase your assets. And what better way to start than having a savings account.

Plan for retirement

If your employer doesn’t provide a 401(k), visit your local bank and set one up right away. Planning for retirement is crucial because the money you bring in is only temporary. Once you leave the company, you’re salary goes along with it. To cushion this sudden disappearance of income, you should have a retirement plan like a 401(k) or a life insurance annuity policy.

5 Spending Habits That Can Bury You In Debt

The scary thing about debts is that many people do not actually know how they get into this predicament. It is like saying that they woke up one day and found themselves buried under a pile of debt without hardly any recollection of the events that led to this problem.

The thing is, debt is not something that happens by itself. Debts are caused by concrete events in your life, which can be anything from a job loss, divorce, health condition, and so on. It could be also be brought about by poor financial management and unhealthy spending habits.

Yes, you heard it right. Those little things that you spend for, they can cause you to be deep in debt without you knowing about until it is too late. Here are some of the injurious spending habits that can drown you into a sea of debts. Recognizing these habits is the first step in preventing debts from taking control of your life.

Unhealthy spending habit # 1 – Spending more than you earn

Thanks to the advent of credit card technology, it is now logically possible to spend over $2,000 each month even if what you are earning is only $1,200. Aside from using credit cards, people also tend to dip into their savings and borrow from others just to be able to get away with spending more than what they are earning. But this is NEVER a healthy way to spend money. Limit your expenses to how much money is coming in. If you see that your paycheck cannot sustain your expenses, you either lower down your standard of living or you work extra harder.

Unhealthy spending habit # 2 – Spending tomorrow’s money today

Some people have the habit of spending the money even before it reaches their hands. You may be so sure of the salary raise or the monetary gift that your aunt is planning to give you so you go on a shopping spree today only to find out that your boss changed your mind or your aunt encountered a problem at home and you won’t be getting that money you thought you were going to have.

Unhealthy spending habit # 3 – Spending money you do not have

Credit cards are again to be blamed for this unwise spending habit. Instead of using credit for your expenses, the better alternative would be to use your debit card. This way, you do not incur debts because you would be spending money that is in your bank and at the same time, you get to enjoy the convenience of plastic money.

Unhealthy spending habit # 4 – Using credit cards for regular expenses

For everyday expenses like groceries, gas, clothes, entertainment, and so on, make it a habit to use cash. The premise for this tip is that people are less likely to pay for things that they have already consumed. It is a very bad habit to use credit card in lieu of cash, most especially if you do not pay your credit card bills in full each month.

Unhealthy spending habit # 5 – Using credit cards even when you have cash

There is something about credit cards that make people feel powerful. It is probably the smooth move of taking out a shiny card out of your wallet and swiping it instead of counting bills and coins. But this is the surest way to get yourself into debt. Get rid of the “something for nothing” mindset and use cash or debit card more often than your credit cards.

Lastly and probably, the most dangerous spending habit of all is not changing your spending habits even when you are already deep in debt. Analyze your spending patterns and see how you could learn from your past mistakes. Not realizing that you have a problem with your spending habits would cause you so much more trouble. It would be a good idea to look for consumer credit counseling services for financial advice and to undergo credit card debt consolidation program to make it easier for you to pay for existing credit card debts.