The Finance Blogger


Tips For Consumers Applying For An Unsecured Personal Loan

Tips For Consumers Applying For An Unsecured Personal LoanA personal loan can either be secured or unsecured. Before we talk about tips for consumers applying for an unsecured personal loan, we will define the two different types of personal loans. A secured personal loan is one that the consumer offers a security usually equity in a home for the loan. The lender has the right to sell the home if the consumer does not repay the loan or misses payments on the loan. An unsecured personal loan is one where the consumer does not offer any security other than their own promise to repay the loan based on their credit rating, income etc.

Tips For Consumers Applying For An Unsecured Personal Loan

If you are applying for either type of personal loan, the following tips may help you in your quest to be approved.

  • Have a pay stub available which shows your income and deductions
  • List all of your major assets
  • List all of your debt including car loan, credit card debt and mortgage
  • List all of your payments for the above as well as utility, rent and / or mortgage payments
  • Know what your credit rating is and why it is at the level it is at
  • Be prepared to defend your credit rating if it is not as high as it should be
  • Be able to explain what the personal loan is for e.g. consolidate credit cards, renovation of a home, trip etc.
  • If your debt payments divided by your monthly income is more than 35% many lenders will shy away from approving a personal loan. Be ready to explain how you will deal with this
  • If your spouse is co-signing for the personal loan, have all of her or his information available as well

This tips for consumers applying for an unsecured personal loan will help you prepare for and be approved for a loan. Even if you have a bad credit rating, having all of this information ready shows the lender that you are serious and ready to make a commitment to repay the loan.

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