Your credit history is often considered a barometer for your financial health. A lender will use your credit score number to determine your risk as a borrower. The lender will then decide the total amount for a personal loan you qualify to obtain. Lenders also take into consideration the length of the loan and the amount of money they will loan out–this may be reflected in the interest rates.
For example, those with low credit scores will only qualify for bad credit personal loans that are smaller, have a higher interest rates and a very concrete payment schedule. Those with a good credit history will be able to get the best rates, the highest loan amounts, and the most flexible repayment schedules available.
How to Get a Bigger Personal Loan
Based on your credit history and income, personal loan amounts can vary from around $1000 to $150,000. These advances are truly personal and differ greatly from person to person. Those with a very bad credit history may only qualify for a
maximum of $1500, but of course, this amount varies and it ultimately up to the particular lender.
The differences exist because personal loans are some of the riskiest for banks to offer since they are generally unsecured. Other loans require some type of collateral (such as a house or a car) to be approved by the lender. However, personal loans are granted on an unsecured basis, purely on good faith determined by your credit history, income, length of employment, years at your current job and other contributing factors.
Regardless of the amount you have on your personal loan, even having some type of loan can be an excellent way to rebuild a scarred credit history. If you have a bad credit history and is only approved for the smallest loan amount, but you show amazing responsibility in paying off the loan, this can add valuable points to your credit score. The next time around it should be easier to get a larger loan at a smaller interest rate.