Unsecured Personal Loans
Unsecured Personal Loans are loans offered by financial institutions that are not securitized by assets such as a car or a home. Because they are not securatized, the underwriting criteria the bank will demand will increase significantly as the loan amount increased. To get a loan higher then $2,500, the lenders will be looking for Excellent Credit (720 FICO or higher) or Alt-A credit (680 or higher). They will also typically require a steady employment history, a low debt to income ratio, and decent income.
If you have Bad Credit, you are unlikely to qualify for an unsecured loan unless it is a low dollar amount Payday Loan which has a maximum value of $1,500 or a loan from Cash Call which lends up to $10,000 at the time of this article based upon factors such as your credit score, income, and debt to income ratio. These loans often have very high interest rates, so understand the terms and costs associated before accepting one.
If you are a homeowner, consider taking a home equity line of credit instead of a unsecured loan as you may save a lot of interest, not to mention potentially qualify for tax deductions. A Credit Card may be another way to go as well as you can often find low introductory rates on many cards as well as more flexible repayment terms. Like any financial product, it is best to research your options and clearly understand them before you sign the loan documents.
