What is Guaranteed Loan Approval?.Guaranteed approval can be interpreted no matter how bad your financial situation is, the lender will still lend you money if you submit an application.Guaranteed approval is certainly not the case. In fact, it can be said “guaranteed approval is a myth,” – www.opploan.com. To anyone who applies for a loan, the lender will apply the terms of the agreement. Every lender has a minimum standard that must be met by prospective customers. Only approval requirements are made easy but not guaranteed!
At present, in order to attract as many customers as possible, many lenders apply less stringent requirements. For example, the bank only asks you to show a functioning bank account. If you don’t have an account, you are asked to make it first. Generally, these requirements will be applied by payday lenders to secure your loan. That’s the only condition. You only have enough accounts, the borrower will lend you money.
Is Approval Really Guaranteed?
If you have bad credit, the borrower will tighten your loan terms. If you have a credit score below 630, you will find it difficult to apply for loans at traditional banks. In addition, applying for a loan from a bank or credit union can also make your credit score lower!
For this reason, many people with bad credit status divert their loans to lenders who do not require credit checks. For borrowers who do not require a credit check they will not check credit credit scores before issuing a loan. For someone who has bad credit a loan without a credit check can be an alternative.
You are currently advised to be careful when lenders advertise or offer you guaranteed approval for loans without a credit check. Why? Because guaranteed approval is not something real, even people often refer to it as a myth. Be careful of the promises of such lenders. They are like “predators” who want to trap you in a long cycle of debt.
That’s a Warning to You
Why do lenders without credit checks advertise guaranteed approval? That’s to entice you to click on their advert or walk to their store. Advertising guaranteed approval is a lender’s tactic to get your attention and get you ready.
Lenders like this know very well the prospect’s condition that they are targeting. They have poor credit scores, low financial literacy rates, and usually need money fast. The lender hopes that once they click on the ad site or enter their store, they will come out with a loan.
Generally, lenders carry big promises, where they are likely to have no intention of obeying them. If they correctly approve your loan, that means the lender doesn’t care about your ability to repay the loan. If so, it’s a sign that the lender will trap you in a dangerous cycle of debt.
Avoiding Debt Trap
Lenders that promise guaranteed approval are mostly from payday lenders. These lenders usually offer loans to borrowers without credit checks and short-term loans. The lender will usually give a postpaid check along with the interest calculation. Isn’t what the payday lenders doing great? In fact, it’s very easy to get a loan from them!
They don’t want to give you a loan that you can’t repay.
Pay loans rely on your inability to repay loans in the first place. They want you to turn the loan or pay back and then immediately take a new loan (reborrowing). People finally take loans for loans. They will continue to pay debts with interest wrapped around them. Borrowers will find it difficult to pay off debts, because they never get closer to paying the principal. It is the worship of the vicious circle of debt, endless.
Guaranteed loan approval is the backbone of the payday loan industry. According to a study from the Consumer Financial Protection Bureau, as reported at www.opploans.com, 75% of the payday loan costs come from borrowers who take 10 or more payday loans in a 12-month period.
Lenders like this target people with bad credit scores who don’t have many other choices. The lender is deliberately looking for customers who are unable to pay the loan because it provides the best benefit. These are the characteristics of credit providers who like to advertise with promises of guaranteed approval.
Stay Away No Credit Check Loans
One thing you always have to remember, when you apply for a loan without a credit check, means that you face a very high risk of dealing with a malicious lender. Why? Because people with bad credit – unable to pay regular loans or do not have savings to deal with a financial emergency – are the primary target of this lender.
They may not have other credit options other than borrowing from payday lenders. They generally have low income and do not understand financial matters. They are the type of people who can easily get caught up in an endless cycle of debt.
For those who want to apply for loans at the bank, there are still better options than borrowing from guaranteed approval loans. You are still better off borrowing from a lender who provides soft credit loans.
What is a soft credit check lender? They are lenders who do look at your credit history to see if you can afford to pay a loan or not. This is the best choice. Soft credit won’t affect your credit.
The possibility of your soft credit being approved is greater, even though the lender will check your credit file to find out your ability to pay. That’s the condition for getting soft credit. You can apply for a loan without fear of dealing with the “killer”.