Getting $50,000 Personal Loans With Bad Credit Despite the Credit Squeeze

Securing a large loan is never going to be easy in these times of austerity. Banks are not willing to lend as freely as they once did, and those that are have criteria that are very strict. So, getting something like a $50,000 personal loan with bad credit can seem like too much to hope for.

But the good news is that there is a way to secure such funds. There may be no such thing as guaranteed loan approval, but the credit squeeze is not quite tight enough to have dried up options completely. It all comes down to properly preparing your application, and choosing carefully which lenders to approach.

When properly prepared, anything is possible, even a large personal loan. And for this reason alone, it is worth taking time to consider your strategy before filling out any loan application.

Traditional Lenders or Online Lenders?

It is always tempting to go straight to our own banks when we are looking for a loan, but the problem is that traditional lenders have the most stringent lending policies. This means that getting a $50,000 personal loan with bad credit is pretty unlikely, especially a loan that comes with low interest rates and reasonable penalties.

The best option is online lenders, who are experts in providing loan packages specifically suited to people with low credit scores. In some cases, no credit checks are carried out, offering guaranteed loan approval as long as the income level is proven to be sufficient to handle repayments.

The great advantage in going to an online lender, however, is that interest rates are lower than those charged by banks, and the repayment schedules are usually much more flexible. The only concern is whether a large personal loan will be approved, but there are ways around this problem too.

Sufficient Income and Cosigners

Income is always important when lenders are considering loan applications. However, a large monthly income may not be enough to secure a $50,000 personal loan with bad credit. This is because the degree of existing debt is also important since it is this figure that dictates how much income is available to make repayments with.

The debt-to-income ratio of 40:60 is strictly adhered to by lenders, which means that no more than 40% of available income is allowed to be used to cover loan repayments. So, even if it might seem that an income of $10,000 is enough to guarantee loan approval, it is not. If the added repayment pushes the income share over 40%, the application will be rejected.

The safest bet is to find a cosigner, someone who is willing to guarantee monthly repayments by taking over responsibility should the borrower no longer be able to pay. If a lender knows that repayments are assured, then there is very little preventing them granting a large personal loan.

Be Cautious With Online Lenders

While the online lender is the logical choice for anyone seeking a $50,000 personal loan with bad credit, there is a need to be cautious with the move. The problem with borrowing online is that some unscrupulous lenders are able to operate there with great freedom. Getting caught out can prove extremely expensive, even if the original loan deal seems excellent.

Always check the small print of a loan agreement, with particular attention paid to late fees, administrative charges and other hidden extras. Sometimes lenders will offer guaranteed loan approval as a way to distract borrowers from checking out these factors.