The phrase “bad credit personal loan guaranteed approval” may sound like a scam. And if you’re struggling with bad credit right now, you may not know what this means. But all is not what it seems with this type of loan. When those with less-than-perfect credit apply for a loan, they expect to be turned away.
While not a scam, the phrase can be confusing. A bad credit personal loans guaranteed approval that is guaranteed by the lender. This means that the company offers no excuses in case the applicant is approved for a loan. If this policy sounds too good to be true, then it probably is! Be sure to read all of the fine print before you sign on any dotted line.
There are many great reasons to take advantage of a personal loan. It is a great way to buy what you need. However, before you apply, make sure that you know what is guaranteed and what isn’t.
Now, let’s define exactly what “guarantee” means and how it applies to personal loans. A loan with a guarantee has two important elements:
- Because the company makes the loan available, it cannot lose any money. If the borrower fails to pay at the end of the term and does not qualify for a new loan (and a re-financing), the company does not have to compensate the lender for this loss.
- The company must have the ability to pay the loan if the borrower fails to make payments. Most lenders require that they have a sound enough balance to go through with this guarantee. This means that someone else is holding up their own personal money, just in case it is needed by an applicant who does not qualify for a personal loan but has the ability to make one.
While guaranteed approval is not necessarily a scam, it can be confusing and misleading if you do not know exactly what it means. A company cannot say, “You have 100 percent approval; we guarantee that you will get approved.” That really isn’t correct.
While you should always be skeptical of any loan, especially one that requires that you put your own money at risk, it is best to know the details of the loan. Even if you are working with a company that is guaranteed, they, too, can fail. So read the fine print before applying for a guaranteed approval personal loan.
In conclusion, “bad credit personal loan guaranteed approval” can mean a variety of things. Despite what the phrase might seem to imply, it is not a scam. However, be sure to understand the details before you sign on your application.