All You Need to Know About Guaranteed Loans
Many people find themselves in need of extra cash at different times of their lives to cover various costs. But trying to find a loan when you have a poor credit score can feel almost impossible at times. This is where guaranteed loans for bad credit come into play.
Guaranteed bad credit personal loans exist to help people in difficult financial situations. They’re ideal for those who find it difficult to get approved for regular personal loans because of poor credit. But what exactly are guaranteed loans? How do they work, and what advantages do they offer?
Well, there are several misconceptions about this type of loan. It’s important to note that guaranteed loans, regardless of credit, aren’t simply given out to every applicant, no matter what. The “guaranteed” part of the name actually refers to a “guarantor”.
This is a third party who essentially fills out part of the loan application with you. The guarantor promises to pay off the debt on your behalf if you’re unable to make the repayments. Read on to learn all you need to know about guaranteed loans.
What Are Guaranteed Loans?
You may see lenders offering bad credit payday loans with guaranteed approval or bad credit personal loans with guaranteed approval. But what does it mean to get a guaranteed loan? Well, with this type of loan, the applicant asks for the support of a guarantor.
The guarantor is the person who guarantees the loan. This means that they agree to liability for the loan repayments if the primary applicant is unable to make them.
This means that, in the eyes of the bank/lender, the loan is guaranteed to get paid off. No matter what happens, the bank or lender will get the money, thanks to the guarantor.
So if you have poor credit, you won’t get 100% guaranteed approval with this type of loan. But you will have a much higher chance of getting approved with the help of a guarantor.
How Do Guaranteed Loans Work? – Bad Credit Loans Guaranteed Approval Process
So how does it work when you make an application for a guaranteed loan? Well, you’ll first need to find trusted guaranteed loans for bad credit direct lenders who offer this type of loan. You’ll also need to find loans with rates, terms, and limits that suit you. Then, before making your application, you’ll need to find a guarantor.
This is the person who accepts responsibility for your loan. They’ll agree to pay it off on your behalf if you can’t make the repayments. So the guarantor has to be someone who you can trust and who trusts you. This is why most applicants will choose a close friend or family member to be their guarantor.
In addition, the guarantor needs to have a good credit rating. The person applying for the guaranteed bad credit personal loan can have a bad credit score. But the guarantor needs to have strong credit. This shows that they are able to support the application and take on the possible liability later on.
Guarantors need to understand that they will become liable for the debt if the borrower can’t make payments. Once the guarantor agrees, the full application can be made. Approval still isn’t guaranteed 100% with this type of loan. However, bad credit applicants will have a higher chance of being accepted than they would for a regular personal loan.
It’s also important to understand that there’s no such thing as guaranteed loan approval no credit check. The lender will always run a credit check on both the primary applicant and the guarantor. Only after the credit check will they decide whether or not to approve the loan. Lenders that offer loans with no credit check may be illegal and it’s worth first checking them out on the FCA register.
Why Should You Apply for Guaranteed Loans for Bad Credit in the UK?
So who should contact guaranteed loans for bad credit lenders and apply for this loan in the first place? And what sorts of benefits can be found in guaranteed loans UK as opposed to other types of personal loan? Well, there are actually plenty of benefits associated with guaranteed loans. This is why so many people see them as a good option when they need money but have poor credit.
Guaranteed Loans for Bad Credit with High Approval Rate
One of the main reasons to apply for guaranteed loans in the UK is that they offer a higher-than-average acceptance rate. This is especially true when compared to standard personal loans and several other types of loans too. So, if you might not have your application accepted for a regular loan, a guaranteed loan could be just right.
Guaranteed Loans for Bad Credit
Another big advantage of guarantor loans in the UK is that they’re ideal for people who have poor credit scores. Getting a loan when you have minimal credit history and low credit, in general, can be immensely difficult. Most banks reject applications immediately if the score isn’t high enough. With a guaranteed loan, lenders will look beyond your credit score. They’ll look at the credit status of your guarantor before deciding to approve or deny the application. It’s also worth noting that taking out a guaranteed loan and paying it back can improve your credit score too.
Loans with Guaranteed Approval in the UK (for Less Stress)
The straightforward approval process with a guaranteed loan also makes the whole process less stressful for the applicant. Applying for regular personal loans can be stressful. You have to worry about hard credit checks and the possibility of rejection. There are fewer worries associated with guaranteed loans. Plus, you have the added reinforcement of a guarantor to cover you in case you miss any payments.
Guaranteed Loans UK Amounts, Rates, and Terms
Guaranteed loans for bad credit UK are aimed at people with poor credit scores. However, unlike other types of bad credit loans, the rates can be quite attractive. There’s also a reasonable amount of flexibility in terms of amounts and terms. So these kinds of loans can be seen as more affordable, versatile, and less risky.
What Are Guaranteed Loans in the UK?
No, there are always credit checks involved in any kind of loan application, so you will need to undergo a credit check, as well as your guarantor. As a warning, you should always keep away from any loan with no credit check as they are possibly not regulated and can cause big problems.
Am I Guaranteed to Get Approved for a Loan with a Guarantor?
No, not necessarily. There are still certain requirements to meet, and your guarantor needs to have a good credit score.
Do 100% Guaranteed Approval Loans Exist?
No, it’s important to note that guaranteed approval loans do not exist. There is no legal loan that has a 100% approval rate. You should not trust any company or lender you see offering guaranteed approval loans. It’s best to avoid these kinds of lenders entirely, as they are probably lending illegally. Read here about loan sharks and what to look out for.
What can I use guaranteed loans for?
Most people use guaranteed loans to help them cover an unexpected cost that has come up, such as urgent medical bills or emergency car repairs. Guaranteed loans should only be used when there is no cheaper option available for you. Other things you might need to take out a loan for could be to help you pay for an oven repair or sudden bills you didn’t see coming.