Jessica Rodz January 2, 2023

You need to be careful!

We have come across this word ‘guaranteed loan approval’ many times in our lives. When we look for loans, we consider this one of the most attractive loan features. What else would make a borrower happy when a loan is approved in whatever conditions that borrower asks for the money?

Think again!

While many lenders are said to offer guaranteed approval, the term sticks close to the technical world of lending. To know that, it is your duty to learn different lenders, lending practices and what official requirements exist for borrowing money.

You also need to stay safe. There are predatory lenders, more commonly referred to as ‘loan sharks’, out there who can dramatically make you fall into a ‘loan trap’. They do this by using fake guaranteed approval and no credit check facilities.

You must do two things if you don’t want to find yourself in such trouble. One, you have to know how lending works in your country. Two, you need to come up with tactics to search for an authentic lender so that you can avoid loan sharks and risk your finances.

  • The Basic Idea of a Guaranteed Approval

There is a difference between easy approval and guaranteed approval.

Guaranteed approval means the borrower will get approved in any sort of financial condition.

Don’t you think it is a little odd? How can a lender help you if you have no legitimate bank account or no promising income? Sure, there are loans such as doorstep loans or loans for the unemployed. But, they all work as per your INCOME.

Hold on a little! You don’t need to show your lender that you have the most high-paying job or business. Your income is the route by which you are going to repay the loan. Your lenders are going to look at your requested loan amount. They will then check your income to find out if you can repay comfortably and then will sanction the amount.

You will naturally use part of your income to repay the loan instalments. You do not have to use the total amount from your income. You also have got a family to feed and personal expenses to take care of.

So, no lender will approve a loan if a person cannot show a legitimate way of repaying the money. Is it possible for them to lend money to a borrower who does not have options for repaying the money? Lending also has professional and legal boundaries.

This is where we need to speak about direct lenders.

In most cases, you will see direct lenders market their loans with the tag ‘guaranteed approval’ or ‘100% guaranteed loans’. This is not a false statement. Going through the website, you will learn that a 100% guaranteed loan approval in the UK from any direct lender service is possible when you can formally produce evidence of your income to establish the factor of repayment.

When you can show your lender that you can repay the loan you are taking out, the organisation will give you guaranteed approval. It also shows your responsibility as a borrower to pay back the money using what you earn.

Now you might be thinking about how you may repay when you look for loans for the unemployed or a student loan. Well, thinking clearly, it does not always mean you won’t get reemployed later. You don’t even need to have a traditional or regular day job. You can very well earn from other income sources to pay the money back. Options like these include:

  • Next/ Upcoming Income
  • The resuming/ continuation of present income in the near future
  • A part-time work
  • Freelance
  • Benefits programs
  • Contractual Work
  • Business revenue and sales statement

Hope you have already learnt what guaranteed approval means. You may categorise it as an easy approval when you can show your lenders how you would like to repay. In that regard, you can still call it a guaranteed approval.

  • What Dangers Lie with Fake Guaranteed Approval Means?

Let’s get an explanation of the situation.

Have you ever seen a person take out repeated payday loans – such as 5 or 8 – in a matter of 12 months? Actually, this is a reality, and many people suffer from this issue if they have not chosen the right lender.

One may fall prey to this tricky situation with predatory lenders or private loan sharks. The thing is, most of these lenders market their loan product by means of 100% guaranteed approval, no credit check hassles or things such as loans in zero income etc.

The problem is that the offers easily lure a borrower, who does not have any income or valid financial statement. As a result, they cannot pay the money naturally. This is what the predatory lenders want. In these situations, the borrower either has to pay the loan amount back, compromising personal expenses or take out another loan.

This repeated borrowing, known as re-borrowing, works as a trap for most borrowers. This is what the loan sharks want. They roll over loan after loan, and you pay back all of them each time your interest is higher than the previous one. It does not help to repay the principal amount because more loans keep dragging you away.

 This cycle tends not to end until you have taken care of the situation with something legitimate such as a debt consolidation loan from a direct lender. This loan takes all the previous loans into one so that you can use the amount to completely get rid of the previous loan (or loans) you had. You can get one interest rate and steady repayment duration to pay your lender back comfortably.

To Conclude

Being careful matters. Before you get in touch with any lender, check if the organisation is authentic by reading more about the brand. Check testimonials of other borrowers to learn more.

If you want professional and authentic services for a loan, then choose direct lenders. Of course, do your research to find out if they offer trustworthy services.