How to Get a Large Personal Loan Without Having to Have Collateral
Most lenders require collateral when you apply for a personal loan. Thus, if you default or stop payments on the loan, the lender can use your collateral as repayment. However, it's possible to obtain a personal loan without collateral or security, and you can use the money for any purpose such as home improvements or debt consolidation. These types of loans are harder to obtain, and the borrower must meet certain requirements.
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Instructions
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Request your credit report and score. Your three-digit credit score determines your ability to obtain a personal loan without collateral. Good credit is a requirement. Order your report and score from websites such as AnnualCreditReport.com to examine your credit history.
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Postpone applying for a loan. If you have a fair to low credit score due to late payments or high debts, make credit improvements before submitting your application for an unsecured personal loan. Submit timely payments and lower your debt load.
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Compile your financial information. Prior to approving your loan request, lenders will scrutinize your financial history and ask for information regarding your income and other assets. Have these documents on hand. Bring copies of your paycheck stubs, tax returns and bank statements.
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Get loan quotes. Compare loan quotes to receive the best interest rate. Discuss your options with two or three lenders and request a loan quote. Complete a loan application and submit your financial history for an accurate estimate.
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Anticipate a higher interest rate. Unsecured or non-collateral loans typically feature higher rates. Be prepared for higher fees before applying for a loan.
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Consider using a co-signer or joint applicant to improve your chances of getting a loan with no collateral. For you to qualify for such loans, your cosigner must have a suitable income and an excellent credit history.
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Choose alternative loans. If you need immediate cash and you can't get a bank loan, look into cash-advance options. These loans don't require collateral or credit checks. However, you'll need to meet the lender's income requirement (approximately $1,000 a month).
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