A bad credit rating now has about a third of all Americans. At the same time, financial assistance may be required for each person at any time. With a bad credit the probability of getting the necessary loan is greatly reduced, so you will most likely be wondering if you can count on the fact that you can get a guaranteed loan. To find out whether there is such a thing as a guaranteed loan and how you can get it, we offer this guide.
What are guaranteed loans?
To offset the risks associated with your bad credit, lenders significantly raise interest rates for such borrowers. This allows them to have a profit, even if some borrowers will not be able to repay the loan. In addition, when reviewing applications for loans from borrowers with a low credit rating, lenders do not conduct credit checks, but rely solely on your confirmed current income. Also, lenders can offer you a secured loan, when your property is used as a guarantee of compensation for the lender’s expenses. Risking your property and the likelihood of paying high interest rates you will be more motivated to repay the loan on time, and as quickly as possible.
What types the loans with guaranteed approval are?
Loans with a guarantee of approval can be divided into two main types: these are secured and non-secured loans.
- Unsecured loans
Unsecured loans are often payday loans. Instead of relying on your credit rating, lenders most often suggest that you sign a permit to automatically write off the loan amount from your next paycheck. In this case, care must be taken not to fall on unscrupulous lenders who can count and withdraw significantly more money from your salary, than was originally agreed. You should carefully select verified lenders with positive reviews. Such unsecured loans will have a higher interest rate than secured ones, but on the other hand you will not risk losing your property. Especially unsecured guaranteed loans will be relevant for those who do not have suitable property to secure.
- Secured loans
For a secured loan you will need to provide collateral in the form of your valuable property. Depending on the loan amount you need, the property you need to secure will be determined. In addition to tangible property, bank deposits, debit and credit cards can also be used. With a secured loan you risk losing your property, used as collateral, but you will receive a loan with a lower interest rate.
About bad credit borrowers
Some people might think that borrowers with a bad credit rating are just irresponsible people, but this is a too quick judgment. Of course, among borrowers with a low credit rating there is a certain proportion of irresponsible people, but this is by no means fair for everyone. Even completely responsible people fall into different situations and make financial mistakes, or simply do not use some financial instruments correctly. Also, it is important to monitor the condition of your credit in order not to let the situation slide down. You can prevent the formation of a high balance on your credit card by using a credit limit of more than 70% and your credit score will fall.
Bad credit loans can raise your credit score
This may sound incredible, but it is quite possible. To do this you just need to make timely payments on the loan for a bad credit. Your credit score will increase gradually with each timely payment. Such payments, despite your low credit rating, will show that you are solvent. Of course, it will take some time to make all payments without delay, and if possible even before the deadline. Also, if possible, try to pay off more than the minimum payment.
How else can you use loans for bad credit?
In addition to improving your credit rating, you can use bad credit loans for unexpected costs, or for expenses that your savings are not enough for, if you have any. Often, people with bad credit have several debts that they cannot pay on time. You can use bad credit loans to consolidate your debts, to pay off all previous debts and get the opportunity to pay only one total. So it is usually easier to manage debts and you can get a lower interest rate. Also, such loans are often used in case of medical expenses or funeral expenses for someone from your family who can hit you pretty hard. In addition to the situations described, there are still a great many options, which may require loans for bad credit. Their use is most often unlimitedly defined goals, besides some exceptions.
Apply today and choose the right lender from many offers
If you have determined that you need a loan for a bad credit rating now, then you can apply using the form on our website and get feedback from many lenders.
You can learn more about how to make the right choice from several offers in our financial blog. For more information and professional advice, please contact us via the feedback form and we will contact you.