Many borrowers want to apply for an online payday or installment loan that guarantees approval and decision, as well as a prompt disbursement of funds on approval.
The phrase “Guaranteed Approval Online Loans” is a famous but confusing phrase for many in the online lending world. For the majority of lenders, it’s quite a controversial word as it can be misleading for many borrowers who don’t understand it. And for most borrowers, it’s perhaps the most confidence-giving phrase for borrowers who really need to get money fast but who also fear they may not be having some of the requirements lenders place for different loan options that the borrowers might be interested in.
In this article, we aim to clear the mist on guaranteed approval loans, the instances when your loan application can get guaranteed approval, and instances when it can’t. We’ll also look at various online loan options you have as a borrower and how you can maximize your chances of securing a good online loan that can give you the amount you want and with favorable repayment terms.
What Online Guaranteed Approval Loans Mean
Guaranteed approval loans are loans that are supposed to promise any borrower who sends their application for a loan that they’ll be approved for the loan even before they send the application.
The loans are supposed to have their doors open for any borrower out there regardless of the stability of their income, credit score, credit history, and other critical factors that come to play in borrowing and lending.
While this concept seems thrilling and hopeful for many borrowers who’ve been rejected on past loan applications, the concept doesn’t exist in real life. It’s simply a marketing technique that some unlawful marketers and lenders of online loans adopted as a way to draw in more borrowers to their loan products.
And when borrowers followed their lead, they ended up getting discouraged after realizing it was all a sham. This is because after applying for these loans, they went through pretty much the same process as other loans they previously applied for that ended up getting rejected.
False marketers still exist and you’ll find so many “guaranteed approval” advertisements which work in the same way. So be wary and think twice before you choose to go down that rabbit hole.
In general, the only way you can be guaranteed an online loan is if you meet the general and specific requirements set aside by lenders of the loans you’ve got your eyes on.
Lenders know that borrowers are always in urgent need of cash when they turn to loans. So, they try to have easy-to-work-with requirements that a good borrower who knows how to plan and use their money carefully, can easily and comfortably meet.
They also ensure the requirements are flexible enough to accommodate good borrowers who repay as expected. Those who are also good borrowers but were once caught up in a tight situation in the past, but are still willing to get back on their feet financially and in terms of credit score, are still able to benefit from online loans.
The lenders’ requirements help them protect themselves from the risks involved in giving out loans. The good thing is that they’re careful with their investments but they still make sure that even borrowers with bad credit can still get financial help when they require it the most.
Loans Advertised as Guaranteed Approval Loans
Some of the most common types of loans you’re going to find online being advertised as guaranteed approval loans include:
Also known as cheque advance loans or cash advance loans, these are loans aimed at helping settle short-term financial problems. They are loans given to borrowers who have a stable income in place with an anticipated payment but who need money before the payment is made to their account in the coming days or weeks.
Payday loans help borrowers get the money that can help deal with the issues they have and then they’ll repay once their payment gets to their account. Lenders mainly rely on the stability of the borrower’s income source and other several factors to get back their money.
A borrower's credit score doesn’t really count when it comes to payday loans but some lenders are still keen on it. For the most part, many payday loan lenders only do soft credit checks which don’t influence the likelihood of a borrower getting their loan application approved or rejected.
A tiny percentage of lenders may go the extra step of doing hard credit checks that involve sending a request to view a borrower’s credit information through credit bureaus. These lenders place a higher priority on the borrower’s credit score and credit history to determine if they’ll approve the borrower’s loan request or not.
Lenders who don’t mind about credit will approve even the loan request of a borrower with bad credit but they’ll expect a lot from them in terms of interest rates and APR (Annual Percentage Rate). The interest rate may range from 10% to 30% or more, and the APR may go up to 300% to 600% or more.
As a borrower, you can fetch an amount of $100 to $5000 on a payday loan. And you’ll be required to pay back the money in an average period of about 14 to 30 days. The period may be longer or shorter than that, depending on the lender you got the loan from, and your state’s laws.
Installment loans offer a more long-term solution than a payday loan as you can get a higher loan amount and a much longer repayment period with it. Here, the borrower is expected to pay a fixed installment amount after every given period until the loan is completely cleared.
You can get an amount of around $5000 or more, going by several factors including the state you live in and your income source. The repayment period may range from 4 weeks to 2 years and the APR is much lower compared to payday loans.
The interest rates are also very affordable but it’s worth keeping in mind that if you get a longer repayment period on your installment loan, you may end up paying more in interest rates.
Online installment loans also don’t have a strict requirement for borrowers to have good credit or provide collateral to cover the lender. Collateral may only be needed if you want a higher loan amount than the lender is willing to offer you.
Since installment loans are unsecured loans, lenders will calculate how much they think you’ll be easily able to pay back without financial struggles, based on your income, monthly expenses, and other factors, and then give you the loan without needing to give up an asset to manage the risk.
However, if the amount the lender approves for your loan is lower than you need, you can provide collateral to increase the amount to that which you feel will be enough for your needs. Another way you can get lenders to offer you a bigger amount is by providing a third party who has good credit to act as a guarantor for your loan. The person will take responsibility for repaying your loan when it comes to a point you’re not able to repay.
Another option is to agree to higher interest rates for your loan in exchange for a higher loan amount. This option won’t require collateral or a guarantor.
Debt consolidation loans
A debt consolidation loan is a type of personal loan that’s aimed at bringing together all the debts a borrower has and paying them off or cutting them down. This loan settles other debts that the borrower has accumulated so that they’re left with only one loan that they can easily manage.
The benefits of debt consolidation include the ability to boost the borrower’s credit score, reduced monthly payments, and easy tracking of the debts. Moreover, it brings down the total amount in interest rates from the debts.
Keep in mind that personal debt consolidation loans are quite different from other forms of debt consolidation like home equity loans and credit card balance transfers.
Online lenders are the best to borrow debt consolidation loans from because they have fewer requirements for the loan. They also save you the time, effort, and money of visiting a lender’s office. Plus, they still allow borrowers to take a loan even if their credit is bad.
Borrowers with bad credit are also likely to benefit more from a debt consolidation loan that’s payable in installments and when they have unsecured loans such as payday loans that attract massive interest rates.
Lenders’ Requirements For Online Loans
Each of the onlineloan options has certain loan requirements that a borrower has to meet to be considered for the loan. And although there are unique requirements, there are a few basic and general requirements that apply to all options. These requirements are:
Having reached 18 years and above
Owning a valid identity card (such as a passport, state ID, social security, or driving license) given by your state or the government
Being a United States resident or citizen
Having a valid and active bank account
Having a stable income source
Having a valid and active email address and phone number
Having proof of employment
When it comes to the income source, you don’t really have to be employed to get consideration for your desired loan. You may be having your business or you’re getting disability benefits or pension. Many lenders are okay with you providing these as your income source.
As for the specific requirements, the type of loan you want and the lender you get your loan from are major determinants. For instance, with debt consolidation loans, some lenders may require you not to be in a state of bankruptcy when applying.
The state you are currently living in also plays a key role as some states don’t permit the operation of payday loan lenders. Some of the states where you can’t get access to online emergency loans as a resident include New Jersey, New York, New Hampshire, Connecticut, Colorado, North Carolina, the District of Columbia, Montana, Vermont, Arkansas, Maryland, Massachusetts, South Dakota, West Virginia, Pennsylvania, and Georgia.
Other states allow lenders to offer their services there but they control how the lenders provide services. The states you can easily access cash advance loans are Minnesota, Michigan, Mississippi, Washington, Wyoming, Wisconsin, Oregon, Ohio, Oklahoma, Alaska, Alabama, Iowa, Indiana, Illinois, Missouri, Idaho, Florida, Delaware, Nevada, North Dakota, Louisiana, Kansas, Rhode Island, Kentucky, Utah, Texas, California, and Hawaii.
The Common Red Flags to Watch Out For in Untrustworthy Lenders
Lenders and marketers with ill motives towards borrowers who have a great need for financial help usually have a pattern you can identify from afar. In essence, their goal is to tell borrowers what they want to hear so that they can subscribe to their services. They let the borrowers find out for themselves that everything they were told was a lie when they’re already too deep to withdraw their application or when they’ve already lost their money.
Here are common red flags that indicate a lender you’re considering may be trying to get you into a loan scam:
They want you to pay some in-advance charges to access a loan - If a lender promises to approve your loan before you submit your application, and then tells you that for that “special” service you need to pay some money to process the loan, you shouldn’t go forward with the lender. It may be a scam. If there are any fees that you’ll be charged, lenders usually take it from the loan and give you a lesser amount. They won’t ask you to pay cash and then get a loan.
They push you to take action fast - Some lenders may tell you that the guaranteed loans are time-limited and if you need to benefit from them you should make your application right away by providing your personal and bank information, and then “sign quickly to get the money sent to your account in seconds”. A good lender wants you to understand the loan terms well and will give you time to read and digest the loan contract. If you get rushed, don’t do it.
They have hidden fees in their loan products - Some illegitimate lenders will often have hidden charges they won’t tell you about before you complete the application. And when it’s time to receive the money, you realize the amount you were promised is far less than you expected. When you ask about it, you get told that there were some fees deducted that you hadn’t been told about earlier.
They’ll give you “the perfect loan” - Another popular trick is where a lender gives you loan terms that are just too perfect. They’ll offer to give you the exact amount you want or more, and they’ll allow you an unusually long repayment period (such as several months for a payday loan) and low-interest rates and APR. And if you have bad credit, they tell you that it won’t affect the interest rates, APR, or payment period. Some may even promise you that there are no interest rates at all for your preferred loan.
They won’t provide official loan documents - You may also come across other untrustworthy lenders who will tell you that you can get a loan without any paperwork needed. And while most online lenders try to reduce paperwork for their loan products, they’ll always give you loan offers and loan agreement documents to review and sign. So, if a lender tells you that you won’t need to sign anything, they may a scam and they’re trying not to leave any traceable trails.
Many other loan traps exist and lenders are getting craftier by the day. This means that in the coming weeks and months, they’ll come up with more ways of convincing needy borrowers that they’re the best options. To be wary and to avoid getting tricked, what you ideally want to look for in an illegitimate lender is any hint of wanting to look too perfect and come across as a very considerate lender without wanting anything in return like higher interest rates.
How to Apply For an Online Loan The Right Way
To avoid falling prey to predator lenders, there are several steps you should always follow as you apply for a loan. Even when you’re in a rush to get a loan for an emergency, make sure you use the steps to avoid getting into more trouble. These steps are:
Step one: Calculate the exact amount of money you need - The first step is usually to weigh your financial problem and do calculations on all the factors necessary to take care of the problem. The idea is to come up with a figure you know will help clear the problem entirely. It may help to add a few dollars on top of the exact amount to handle any unexpected changes as you tackle the issue.
Step two: Decide which loan option will work perfectly for you - With the amount in mind, you should then decide if a payday loan, an installment loan, a debt consolidation loan, or even another loan type like a title loan is best for you. The decision is arrived at through deep consideration of your current financial situation, how soon you expect to get money to repay, how much you can effortlessly repay, and for how long you want to repay the loan.
Step three: Send multiple applications to various lenders - The next step should be to reach out to different online lenders and express your desire to get a loan from them. Applying manually to every lender in your state can be time-consuming and energy-draining too. A better way to handle that is to use lender networks like Cash Payday Loans that will only require you to send a single application and then the application will be submitted to many lenders for consideration.
Step four: Receive a loan offer - Lenders who will find your application worth a loan, will approve it and send you a loan offer. You’ll then be required to review the loan offer and see if it meets your needs. If it does, you’ll just need to accept it and then the lender will send you a loan agreement to read and sign. The agreement will represent the contract you’re going to enter with the lender and the terms of the contract. So read it carefully and ensure you’re okay with everything before signing.
Step five: Get your money - After you’re done with the signature, the lender will then wire the loan amount they approved for your case to your bank account. This can happen in several minutes, 1 hour, several hours after signing the agreement, before the end of the day but still the same day, the following day or even in several business days.
Pros and Cons of Online Loans
Payday loans, installment loans, and debt consolidation loans have their upsides and downsides and it helps to know both sides before working with them so that you’re sure of what to expect.
Quick loan approval and disbursement of funds
Access to the loans all around the clock as everything is done online
Borrowers with bad credit are still able to benefit from the loans
Debt consolidation loans can improve your credit score and give you more access to other future loans
Debt consolidation loans can reduce expected monthly payments on scattered loans and minimize the interest too
Debt consolidation loans can be a good technique to get out of debt
Installment loans can make repayment more manageable
High APR and massive interest rates on the loans
Sometimes a higher loan amount may demand collateral, guarantor or acceptance to be charged a higher-than-normal interest rate
Some loans like payday loans have a short timeframe for repayment
Payday loans are expected to be repaid as one-time payments
Extra fees like origination fees for processing loans
Installment loans can attract more interest on your loan if you have a very long repayment period
The loans can add to your debt if not well handled
Frequently Asked Questions (FAQS) About Guaranteed Approval Loans
Prequalified online loans are quite a tricky topic and many people who get to hear about them often have many questions. Here are some of them together with their answers.
Does it mean guaranteed approval loans aren’t really assured loans?
There are no loans that a borrower can be approved for when the lender hasn’t taken a look at their application. The only way you can be assured of a loan even before the lender reviews your application is if you’re sure you have everything the lender wants from borrowers, in terms of the requirements. If you’re sure you check off every item on the lender’s top priority requirements list, then you can be confident that your application will surely go through.
How do I better my odds of getting approved for online emergency loans?
To better your chances of quick approval for the loans, aim to fill out the form as best as you can while giving the right information. The clearer you are, the less the lender is going to spend time confirming your details, and thus the faster you’ll get approval. So keep things simple, detailed, and straightforward. To improve your odds of successfully repaying your loan and getting more in the future, seek to have a good repayment plan that will see you repay your loan on time regardless of delays with your payment from your income source. The more you aim to make payments when they’re due, the easier your repayment journey will be and the better your reputation with the lender is going to be, when lenders trust you, it becomes easier to access higher loan amounts and more flexible terms.
What happens when I delay my repayment or even miss it entirely?
Delaying your repayment only adds to the overall amount you’re expected to pay. Lenders put penalties on your account for delayed repayments if you don’t contact them in advance to make them aware that you might delay so that you plan for a rollover. It’s also not recommended that you miss a payment since the repercussions for missed payments may strain you in the long term. This is because you may get charged interest for each day that passes after the due date. If you choose to default, lenders may exercise their authority to recover the money you owe them. And that may include hiring a credit collection agency that will constantly harass you and even take your personal belongings. Worse still, your interaction with the collection agency will appear on your credit report and may remain there for many years to come. With such a report, it’ll be difficult for any lender to give you a loan as they don’t want to have the same experience with you.
Are the loans worth borrowing?
It depends on why you’re borrowing. If you have a stressful situation that requires money and can’t be kept aside until you get paid, and you’ve explored all options of raising money but all have been fruitless, then a loan may be worth pursuing. However, if you’re planning on getting a loan to pay for things that aren’t really urgent and sometimes not even necessary, you’re getting yourself in deep trouble. Loans are worth getting when they are taken to tone down the pressure that comes with an emergency that requires quick and immediate attention like a medical emergency.
What other alternatives can I consider for quick online loans?
When you want to borrow, the first place to start is a source of money that won’t charge you interest on the money you get. And these sources can be your friends, family, and relatives. Although people who know you can lend you and not pressure you to return the money, it’s good practice to push yourself to pay back the money immediately after you get it. Avoid putting it off as you may end up failing to pay it back and then have a hard time getting more money in the future if another emergency arises. Another option is seeking financial assistance from not-for-profit institutions (in your area and online) that are willing to help out people who are in great financial distress. These companies may be affiliated with certain spiritual and religious centers. Credit unions are also a viable option. When all else fails, you can now consider getting a quick emergency loan online.