Is It Possible To Get Guaranteed Loans With Bad Credit?
Emergencies can pop up when you least expect them. With many people struggling with poor credit and no savings, borrowing remains the only option when disaster strikes. Traditional banks, however, consider individuals with bad credit as high risk and cannot fund them for fear of them defaulting or missing payment.
So what can individuals struggling with low credit scores do when they need short-term loans to tide them over emergencies? Well, there are guaranteed loans for bad credit that these borrowers can take advantage of. With these loans, you are guaranteed approval regardless of your bad credit history.
So what exactly is a good credit score and why does it matter?
Good credit means different things to different lenders. The bottom line is that for you to get a loan with better rates, your credit score has to be above average. The latest walletHub data estimates that the average credit score for some U.S citizens is 669, which is considered a good score by many lenders.
Let’s explore some scores according to FICO ratings and learn what they mean:
- 300 – 550– if your credit falls in this range, you are a high risk borrower and in most cases, lenders will reject your loan applications. It’s important to work on your score before applying for a loan. In this category, borrowers are 75% likely to be delinquent.
- 550 – 620 – this is considered fair but getting a loan approval is not guaranteed. If you, however, get your request approved, it will be under very disadvantaged terms. Borrowers in with these credit score in most cases are likely to be 50% delinquent.
- 620 – 680 – a credit score within this range is acceptable to many lenders. Borrowers in this category are less risky and even though they may not get the best rates, their loan requests are likely to be approved. The default rate among these borrowers is at 15-30%.
- 680 – 740 – a score above 700 is considered as good credit. Borrowers with these scores will always get credit with good interest rates. Lenders are sure that the borrower will not be late on payments or default, and therefore, consider them less risky. Lenders can, however, expect a default rate of 5%.
- 740 – 850 – this is excellent. Borrowers with such scores have never been declared bankrupt or delayed payment on any bill by 60+ days. They also have $10K available in credit and have had a loan/credit card experience of more than 5 years. Getting funding with these scores is easy and lenders are quite relaxed when dealing with such borrowers.
From the above analysis, it’s evident that with a good credit score, getting a loan is easier. You are also likely to get better interest rates that’ll make your loan more affordable.
To improve your credit score, you should:
- Always pay your bills on time.
- Keep updating your credit reports and ensure it’s free of errors and outdated information.
- Keep old accounts open.
- Keep your balance low.
- Avoid opening new accounts.
Can borrowers with bad credit get loans?
The truth is, many lenders, especially the traditional ones who perform credit checks before approval may not lend out to bad credit borrowers because of the risk involved. There are, however, lenders offering loans for bad credit to borrowers at a high interest rate.
The high interest rate is usually to cover the risk involved in case the borrower defaults. So with good credit or bad credit, borrowers can still get fast loans to help them during emergencies.
Lenders may perform soft credit checks, but will not use your credit history to gauge your eligibility for a loan. Usually, they will approve your loan request without putting a lot of emphasis on your credit score hence the name guaranteed loans bad credit.
How good are guaranteed loans for bad credit?
Although they are known to be expensive, these loans can offer a quick fix during an unexpected financial crisis. Using them as a long-term solution could, however, plunge you into a debt trap that may be difficult to get out.
Don’t be lured by how fast and easy it is to get an emergency loan. It’s crucial that before applying for a loan, you are sure that you can repay it. Payday loans usually have ridiculously high APRs and interest rates that make it difficult for an average borrower to pay off within the short repayment period. You could also opt for cheaper funding options like installment loans that have flexible and manageable repayment schedules.
We understand that you may need emergency cash anytime. We are here to help you get quick and affordable funding. By filling out our loan application forms today, we connect you to direct lenders who will review your request and approve your loan request quickly. With us, you are guaranteed a loan even with bad credit. Once approved, the fund will be disbursed to your bank account on the same business day. Our terms and conditions are also flexible and tailored to fit your needs. What are you waiting for? Let’s make your work easier.