Bad Credit Personal Loans Guaranteed Approval

Bad credit personal loans that offer guaranteed approval really seem too good to be true? How can these companies really guarantee approval? Are there any restrictions or stipulations placed on this guaranteed approval that you need to be aware of? Are there any disadvantages of bad credit guaranteed approval loans that you need to be aware of? We will explore these questions and more so that you can better understand how bad credit personal loans with guaranteed approval are right for you.

How Does the Loan Work?

There are actually a variety of bad credit guaranteed approval loans. Many of the bad credit guaranteed approval loans are considered “pay day loans.” However, there are other types of bad credit guaranteed approval loans that you may qualify for. Understanding the differences can be extremely important if you need a loan for more than just a short term cash advance.

In pay day loans, you are allotted a specific amount of money. There is generally a limit to this amount of money and it is usually based upon your income level. Some pay day loans will allow you to use collateral if you need a larger amount of cash but your re-payment to the loan company cannot exceed your income level. Re-payment is scheduled around your pay schedule. You must either pay the full loan amount or renew the loan and repay the interest. This is often a frustrating cycle for some people.

Other types of bad credit guaranteed approval loans are likely to have a lending limit as well. However, your limit is generally much higher because repayment holds a closer resemblance to that of a conventional loan. You have a set and predetermined amount of money, which includes a portion of your interest as well as a portion of the loan. The repayment schedule can vary, depending on the lender used. You may or may not have to use collateral for this type of loan.

How Does Guaranteed Approval Work?

Bad credit loans with guaranteed approval are not exactly guaranteed. They are, however, much easier to qualify for. You must meet certain requirements, which include a minimum amount of income, income stability, and reliable references. You do not have to have great credit, however.

Bad credit loans with guaranteed approval allow you to have credit blemishes. They may pull your credit report. However, your credit report will not hold as much weight in a bad credit guaranteed approval loan as it would in a conventional loan. Even individuals who have judgments, collections, and previous bankruptcies may qualify for these loans. There are a few restrictions that you need to be aware of though.

If you have a bankruptcy that is still being processed, you will probably not quality for a bad credit guaranteed approval loan. Bankruptcies that are not currently in default are still open for new additions so the denial of your loan application is less about your credit and more about protecting the company. If, however, your bankruptcy is in default, it is unlikely to have an impact on your loan application approval.

Advantages to Bad Credit Guaranteed Approval Loans

For some individuals, a stained credit history can make it impossible to receive approval for a conventional loan. However, there are situations in life in which a loan may desperately be needed. Since the approval criteria are much easier to meet, even an individual with credit problems may be able to get the funds they need. This can enable you to purchase a car, purchase a home, start a small business, pay overdue bills, and more. There is rarely a limitation on what you can use the money for. However, it is important that you check to be sure that there are no limitations on purchases made before applying for the loan.

Disadvantages to Bad Credit Guaranteed Approval Loans

Getting approved for the cash you need sure can feel great. However, there are definitely some disadvantages that you need to be aware of when considering a bad credit guaranteed approval loan. Doing so can help you avoid making a serious mistake.

Interest rates for bad credit guaranteed approval loans are generally much higher than conventional loans. This can be especially true of pay day loans. When you are simply paying the interest, the lender is making money on the amount they loaned you. However, the interest rates are often so high that many borrowers can only afford the interest. This can lead to a vicious cycle that can last for months, even years.

Guaranteed approval loans are rarely reported to the credit bureau, unless you fail to make your payments. This means that you will not receive any credit benefits from your bad credit loan. This can be a little frustrating for some individuals, particularly if they are trying to improve their credit rating.