Large Unsecured Personal Loans Are No Joke - They Are Possible

It is forgivable if talk of getting an application for a large unsecured personal loan approved were to be considered a joke. After all, it does seem a little far fetched when we consider the economic state that the whole country is in. As well as that, lenders are known to have become extra cautious about who they lend to, so the likelihood is surely small.Well, it is no joke. In fact, the rate of personal loans approved without security is unexpectedly high - even such loans that are for large sums of money. But there is method in the madness that these lenders are showing. In essence, they need to lend if they are going to turn a profit, and so are willing to take the extra risk in certain circumstances.Of course, when we talk of large unsecured loans for personal use we are not talking about a $1 million deal. But while many expect an unsecured loan of perhaps $3,000 or $5,000 to be possible, a large amount is around the $50,000 mark is also.The Security IssueA major factor to consider with any kind of personal loan is the security issue. The fact is that unsecured personal loans are always more difficult to get approval on. This is because the lender can go on nothing other than the income of the applicant to tell whether the loan can be repaid in full or not.Secured loans are a different matter, with the inclusion of an item used as collateral meaning that the lender has something to compensate them for their losses should the loan be defaulted on. Personal loans approved without security tend to be lower in size because this means that the possible losses are smaller. Secured loans are usually higher.Of course, the purpose of the loan is also a factor, with unsecured loans for personal use a rather vague description. In fact, the lender has no way of knowing how the money will be spent, making the risk of increasing financial strain a possibility.Loan Terms and ConditionsMany people go straight to the traditional lending institutions when they want an unsecured personal loan, usually to their own bank. But the fact is that these institutions generally charge higher interest rates and place a lower loan limit to protect themselves from the higher risks associate with unsecured loans.Credit scores are very influential when it comes to getting personal loans approved without security, though they are not the deciding factor. If the credit rating of an applicant is high (around 700) then there is every chance that the application for even a large loan is successful, provided sufficient income is being earned.However, if their rating is low (300 - 650) then it is far less likely that a large unsecured loan for personal use will be approved. This is generally because the rates suggest less certainty in the loan being repaid in full.Getting Around the Credit Ratings ProblemThe good news is even those with very low credit scores can get their hands on a large unsecured personal loan. One way is to take out a series of small unsecured loans, and repay them in full, thereby pushing the credit score gradually upwards. Payday loans, for example, can grant as little as $500, to be repaid when the next pay check arrives.A more immediate solution to getting a personal loan approved without security is to include a cosigner that will act as a guarantor on the loan. This means that should the borrower fail to pay, the cosigner will make the repayment. This extra security can convince a lender that an unsecured loan for personal use will be paid in full.By offering this peace of mind, even an unsecured personal loan can be secured.