Ask any loan applicant and they’ll admit that, in their eyes, the biggest obstacle to getting a big loan is your credit history. And when nothing is provided as collateral, they see approval as virtually impossible. But even a $20,000 bad credit unsecured loan is within reach, if the criteria are met first.

Bad credit is a negative influence on loan applications, but not influential enough to ruin your chance of approval. The main concern of lenders is whether the applicant can afford the loan repayments. Once confirmed that it is, approval with bad credit is very likely.

So, with the approval of a large unsecured loan possible, bad credit applicants have a route to vital funds to ease their financial situation.

But with credit scores largely ignored, what are the top issues lenders consider when evaluating whether a loan is affordable?

1. Loan size

The basic idea behind loan approval is that the borrower can make the monthly payments without being pressured. Obtaining a $20,000 unsecured loan with bad credit may seem easy when the income earned each month is high, but what matters is the size of the payments compared to the excess income.

Complicating the situation is the debt-to-income ratio that applies to all applications. This ratio sets the reimbursement limit at 40% of excess disposable income, after taking into account monthly living expenses. This means that if there were $1,000 in excess income available, the maximum allowable repayment is only $400, which would affect the loan amount.

Since getting approved with bad credit is not the key issue, keeping the loan size as low as possible is a big help. Unsecured loans between $1,000 and $10,000 may be within the range, but $20,000 may require additional preparation efforts.

2. The interest rate

Credit scores have some bearing on the affordability of loans, as they dictate the interest rate charged. A lower score will result in a higher interest rate being charged, so it may be worth the effort to improve your score, especially when looking for a $20,000 unsecured loan with bad credit.

A higher interest rate means a higher monthly payment amount, and depending on the term and size of the loan, up to a 25-point improvement can save $50. While getting approved for a bad credit loan can be complicated by debt-to-income ratios, these savings go a long way.

Improving the interest rate depends on increasing your credit rating, which in turn depends on reducing existing debt. Getting a few small ($500) payday loans that are quickly paid off in full, before applying for the larger unsecured loan, can make all the difference.

3. The Term of the Loan

Another key to making a loan more affordable is to lengthen the term of the loan. The principle is quite simple, with more months in the term, which means that the principal owed is divided into more (and smaller) monthly payments. When looking for a $20,000 unsecured loan with bad credit, this is an important factor in getting approved.

If this loan were to be paid off over 60 months (5 years), the payments would be about $450. But for 120 months (10 years), the refunds would be reduced to $220. So with a longer term, the chances of getting approved with bad credit are much higher.

Lenders also look at other factors, such as job security and whether the applicant is in long-term employment or self-employed. However, even with bad credit scores to their name, applicants can get great unsecured loans, if the application has everything they want to see.