Securing funding is not easy when applying for personal loans with bad credit. Most lenders are hesitant when it comes to considering applications from bad credit borrowers, especially when the loan sum is large. But convincing them that repayments will be made on time is certainly not out of the question.There are issues that need to be dealt with first, of course, which will strengthen the application and make it difficult for lenders to say no. Then getting loan approval is more likely, and the route to financial recovery can be cleared.But what are the main considerations when compiling an application that is strong enough to ease lender worries? These are quite simple, from choosing between a secured or unsecured loan to detailing the purpose of the loan funds. Then the personal loan, whether large or small, is closer to being attained.Secured Or Unsecured Loans?The first choice people face when seeking a personal loan with bad credit is whether to apply for a secured loan or an unsecured loan. There are significant differences between the two, not just in the chances of getting approved but in the affordability and loan size.Secured loans are issued with some form of collateral promised in compensation to the lender in the event that the borrower defaults on the loan. The addition of collateral means that the interest rate charged is lower, but getting loan approval is dependent on the value of the collateral at hand. A $20,000 loan will not be given with collateral worth $10,000.Unsecured personal loans have no collateral involved and so come at higher interest rates and usually more limited loan sizes. A variety of types offer differing approval chances, but they can range from $100 to $25,000, with repayment terms from 14 days (payday loans) to 10 years. The longer the term the more affordable the larger loan sizes are, but also the better the chance of approval.Key Factors to ApprovalSo, how can someone seeking a personal loan with bad credit hope to get approval? Well, the chances are greatly enhanced with collateral, but whether security is provided or not, the key factors considered are income and the debt-to-income ratio. Without these in order, affordability is in question.Income is obviously important, with a proven reliable source of income essential if a lender is to feel confident repayments will be made. Usually, getting loan approval is only possible when a full-time job has been held for at least 6 months.The debt-to-income ratio is probably more important. The ratio is calculated by combining all of the existing outgoings (loans and general monthly expenses), and comparing them to the total monthly income. A 40:60 ratio is set, meaning only 40% of the excess income can be used to repay any new personal loan. Failure to stay within the 40% mark guarantees rejection.The Value of PurposeWith the chief approval aspects being income and the debt-to-income ratio, bad credit clearly has little to do with the process, which is good news when applying for a personal loan with bad credit. However, there is more to it than that also.Purpose plays a very big part in getting loan approval, with lenders wanting to know that the funds will not be wasted. While technically funds from a personal loan can be used for anything, frivolous purposes are unlikely to convince lenders to approve the loan. However, something like clearing existing debts is impressive.And the benefits of having such a responsible purpose mean the terms of any future loans are much better, with lower interest rates and a greater likelihood of any application being given the green light.