Guaranteed Unsecured Personal Loans With Bad Credit: Avoiding the Trap
For bad credit borrowers, it can be something of a challenge to find a lender open to approving loan applications from them. Most lenders are hesitant because of the perceived risk, but this creates a marketing opportunity for online lenders. Offering a guarantee personal loans for bad credit of approval draws interest, especially from those who are applying for unsecured personal loans with bad credit.
But can a loan application ever be guaranteed to get the green light? There are, after all, criteria to meet and affordability has to be proven, so surely a guaranteed loan approval cannot be a realistic offer. Nevertheless, the offer is commonly advertised.
Of course, for those in difficult financial positions, and in need of cash to deal with growing debts, the deal can be too good to pass up on. This is the trap that those seeking unsecured personal loans often fall into.
Why a Guarantee is Impossible
It is true that lenders have the right to offer loan guarantees, but the problem is when that promise is not delivered. For individuals applying for unsecured personal loans with bad credit, the chief benefit is the certainty of getting the funds they need. Failing to get it, can leave them feeling cheated.
If the issue of a guaranteed loan approval is carefully considered, however, it can never be seen as a realistic promise. No lender is willing to grant loans to applicants who have no ability to repay, or to individuals with a record for defaulting on their debts. If they did, they could not make a profit.
It is a different matter when it comes to secured loans, because the lender has access to collateral as compensation should the borrower default. But in the absence of any form of security, the risk in lending unsecured personal loans dictates that lenders be careful who they lend to.
What About No Credit Checks?
Some lenders advertise no credit checks in an effort to attract more applicants. This is not the same as a guarantee, but does offer greater approval opportunities to those seeking unsecured personal loans with bad credit. With their poor credit histories ignored, they have as a much a chance as an applicant with an excellent credit history.
But there is a problem with this offer too, though not one in the same vein as with that of guaranteed loan approvals. Basically, there are certain conditions that applicants must meet, and the offer is typically available with limited loans. For example, most loans granted with no credit checks range between $100 (payday loan) and $5,000. Anything larger requires collateral as security.