How to Get a $100,000 Loan

In order to qualify for a $100,000 loan, you must prove to a lender that you can afford to repay the loan and that you are not a higher risk borrower. When submitting a loan application, the lender reviews the prospective borrower’s credit history and other financial information. Even if you have excellent credit, few lenders write unsecured loans for $100,000. Therefore, you greatly improve your chances of obtaining such a loan if you can put up some kind of collateral for the loan.

    Review your credit report. Legally, you are entitled to a free credit report from each of the credit reporting bureaus Equifax, Experian and TransUnion, once every year. Obtain your credit report by visiting the credit bureaus websites or by calling each credit bureau and requesting to have your credit report sent in the mail. Upon receiving your report, make sure no errors exist and if you detect any mistakes, contact the credit bureau and submit a request to have the report corrected along with supporting documentation. This process can take up to 45 days.

    Find something to use collateral for the loan. Ideally, for a $100,000 loan, you should use your home as collateral if you have sufficient equity in it. Some banks may consider securing a loan against a recreational vehicle, yacht or other type of high-value vehicle if you do not have equity in your home.

    Print out your last two month’s of bank statements and investment account statements. If you are self-employed, locate copies of your last two years of personal and business tax returns. If you are a salaried employee, locate copies of your last two years W-2s and your most recent pay stubs. If you have another source of income such as child support or a pension payment, print out some kind of documentation to substantiate this income source.

    Contact at least three lenders and ask about loan options. Each lender has its own underwriting criteria, but you can tell the lender what kind of collateral you have, your income level and your approximate credit score. Based on the information provided, the lenders can pre-approve you for a loan. Choose the lender offering the best deal in terms of interest rate, closing costs and payment amount.

Tips & Warnings

  • Credit scores below 620 are lower than average and classified as sub-prime scores. Very few lenders offer home loans to people with sub-prime scores. Additionally, you often need a credit score in excess of 700 to qualify for loans secured by collateral other than your primary residence. Therefore, if you find you have a low credit score, you should try to make your debt payments on time and improve your score by settling delinquent debts before you submit an application for a $100,000 loan.

  • Lenders normally review your debt to income ratio as part of the underwriting process. This ratio shows how much of your income goes towards covering debt payments. If your DTI ratio exceeds 36 percent, you may not qualify for a loan. Some lenders offer loans that involve no income verification but you commit mortgage fraud if you lie about your income in order to qualify for a loan. You may face prosecution from state or federal authorities when you commit mortgage fraud.

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