Of course, you’ve heard about a limit to how much can different lenders offer. The truth is – it doesn’t depend only on a lender, but also on a borrower. Your credit history, income, and other factors are all taken into considerations while determining the maximum amount you can borrow. For example, if your credit score is bad, not all lenders will even find you eligible for the smallest sums. Check out Bad Credit Loans in Texas, and see if there’s a solution to your problem. Don’t act too fast though – be careful so that you’ll be able to pay back.
How much can I borrow with a personal loan?
The amounts range from as low as a $300 loan to as high as $50,000, and that’s not even the limit! In some special cases, personal loans can be as large as $100,000 though those are very rare.
What factors go into determining your eligibility for a particular sum:
- credit score and credit history
- debt-to-income ratio
Most of the providers want their applicants to have a score of 680 or higher, but if your credit history is not so clean, there are still options for you. Get to know the rules of your potential lenders, discover your credit score, review your budget and then do careful calculations to find out how much cash you can count on borrowing.
The best way to determine, whether you’re able to afford a particular sum is to follow these easy steps:
- Add up all your bills and expenses.
- Add your debt payments to that.
- Subtract this from your pay.
See, what’s left. If there are a few hundred dollars free, you’ll probably be able to afford a loan for a large amount. If not, you’ve got to cover your existing debt before going into a new one.
What is important to lenders?
After you’ve submitted your application for the loan, it goes through the evaluation process, when the lender takes into consideration different information to determine if you’re eligible for a particular amount. What is a potential provider looking at aside your credit history and debt-to-income ratio? Here are a few ideas of what can be important:
The purpose of that money. Most lenders will ask what are you spending the borrowed amount on. Don’t come up with something unusual – it’s best to answer truthfully, as this will impact your contract and financial future.
Stable employment. Most lenders will consider this as your ability to pay, which in some cases can even override your poor credit score. Though, if they’re still unwilling to budge, you can check out Bad Credit Loans in Wyoming to find better deals.
How can I qualify for the maximum amount?
If you’re applying to get a large sum, like a $40,000 loan, there is no guarantee that you’ll be approved, but you can up your chances. What you can do to possible score the desired amount includes:
- Improving your credit score. The higher it is the better the loan terms will be. For a bigger amount of money, you probably will need a good or even excellent credit score.
- The low debt-to-income ratio will show the potential provider that you can take out a larger loan and then repay it, so be sure to cover your existing loans before applying for a big one.
- Get verification from your employer to assure the lender that you have a stable income.
- Providing collateral may be a good idea to obtain a large sum because secured loans lower the lender’s risks if you default.
While considering all of the above don’t forget about the golden rule: never borrow more than you need. Quick money can be a life-saver, but also can lead you into more debt, so think carefully before applying – the more you borrow the more you’ll have to pay back in interest and fees. Revise your budget carefully before you sign any documents and go into the deal with a cool head.
There are various amounts of loans available for different clients, depending on their history and ability to pay back. Borrowing money can save you from a financial emergency, but it is always advisable to get the smallest sum possible, just to cover your needs and not more. Take out the amount that fits into your budget, and you’ll be fine.