Can You Get A Guaranteed Loan With Bad Credit?

During a time of financial difficulty, it can be difficult to find the finances that you need to see yourself through financial difficulty. Whether you decide to borrow money from a loved one or apply for a loan from a bank this could lead you with no successful applications. But could an unsecured loan be the answer? In this article, we will be providing you with insight into guaranteed loans and whether or not you can apply for one with a poor credit score

What Is A Guaranteed Loan? 

Guaranteed loans are a loan that has high approval ratings. This is where the customer is virtually guaranteed to be accepted for the loan when they apply. This is commonly used by those that have poor credit that has been previously rejected by traditional lenders and banks. 

Though this loan type is called a guaranteed loan, it is important to note that no one will ever be 100% guaranteed for a successful application for a loan as there are soft and hard inquiries that take place in order to check that you are eligible. However, these guaranteed loans are known for having a higher acceptance rate, meaning that you are much more likely to be accepted regardless of the current state of your finances. 

How Do They Work?

A guaranteed loan agreement is commonly made when a candidate is not appealing to any form of a regular bank. This form of application is a way for people that need financial assistance to receive the funds that they need with very minimal risk. Applying for a loan such as this is commonly completed through the use of a personal loans calculator online and provides the lender insight into you as a borrower.

When this loan calculator has been used to apply for a loan a soft inquiry will occur. This is the process of pre-approval when the lender looks into your credit score in order to approve you for an initial offer. Following this, a hard inquiry will occur, this is the process of a lender checking your credit report before the final approval. This form of inquiry will stay on your credit report for up to two years. This will appear every time you got to apply for a mortgage or other form of alternative finance and could have a negative impact on your credit score should you have too many on your credit report. 

Bad Credit And Guaranteed Loans 

If you have poor credit of any kind it can make it increasingly difficult to be approved for a loan from a bank or other lender. Therefore, many people turn to an unsecured loan for bad credit as credit history is not a deciding factor in whether or not you are accepted for the loan. This is beneficial for those in need of financial aid quickly as approval for a loan of this type can take as little as 24 hours. This allows the money to be in your account quickly, allowing you to get yourself out of financial difficulty and begin paying back the loan in the next month. 

By paying back the loan on time and in full, this can have a positive effect on your credit score as it shows you are able to manage your finances securely. Though this should not be used for the sole purpose of rebuilding your credit score, this has the potential to aid you.  In addition to this, a number of loan providers offer fixed repayments, this allows the borrower to choose how long you want to pay back the loan as well as the amount that you will have to pay as a monthly repayment. 

How To Find The Best Guaranteed Loan?

Before applying for a payday loan, it is important to look into the interest rates that you are dealing with when using this type of loan. With the interest rate changing depending on the lender and the amount that you are borrowing, it is important to compare the costs as this will ensure that you are not settling for a repayment price that is not affordable for you. Though it can be a time-consuming process to find a repayment type that is right for you, this is important as this will ensure that the loan is paid back in full and on time. 

With this in mind, there are a number of benefits of guaranteed loans for those with bad credit as this provides those that need it with the emergency funds to help themselves out of financial difficulty without coming into trouble during the initial credit checks.