Vital insights on guaranteed payday loans you must know

These loans can be a perfect opportunity to fetch speedy funds for a short-term emergency. Are they really a valid loan option to consider when you are stuck in a tricky spot? They let you repay with your next paycheck, but they carry high rates of interest.

Above all, you must understand that there is no concept, i.e., guaranteed approval. It is not an ethical practice for the lender to grant loan approval without evaluating the borrower’s eligibility. This cannot be done without carrying out a few checks.

For this reason, you must not think that you can get 100% approval with a payday loan. Lenders who emphasise giving such loans should be verified carefully. Otherwise, you might land in a problematic situation, as they might be potential fraudsters.

There are ways you can detect such false offers. First, it should be understood what they are trying to offer. Some of the lenders might talk about providing guaranteed payday loans for bad credit.

Not always, they are fake sources, but you must understand the basis of such offerings. Here, a genuine lender will never claim to provide sure approval even when you have low credit scores. It is an opportunity to enhance the chances of getting approved despite bad credit.

There are various things about such loans and offers that you must validate. Flip through this blog to have a clear idea about these loans.

Key points about guaranteed payday loans before you apply

Sure, approval for loans is never possible, and you must keep this in mind. These guaranteed payday loans are a risky option, and you must avoid them if possible. Although they claim to provide immediate relief from financial trauma, beware that no such things exist.

Despite rejecting such options straightaway, explore and find if anything useful can be obtained. You must be careful about the lending source. Above all, you must assess your financial standing, the terms and conditions set by the lender, and the rates.

Guaranteed does not mean guaranteed

If the lender is a legitimate one, such offers will come from their end. However, some might try to grab attention, but are genuine. Such terms can misguide, but you must approach with caution.

Validate how the lender operates. Check if they are asking for information to review your income, identity, affordability, etc. A legitimate lender should conduct a few checks to ensure these aspects.

Even when you apply with a direct lender, you will see how they prioritise understanding your affordability. This is considered a prime factor even when your credit scores are not favourable. A reliable lender will pay attention to this factor while issuing funds against your paycheck.

They can be a potential scam

Borrowers dealing with financial hardship are often vulnerable. They tend to easily believe such offers as they guarantee a sure-shot approval of loans. They think of getting external funds without much complexity, which is not possible in reality.

When you opt for loans, some checks will be run on your application. This is to validate whether or not you can repay loans on time. If the lender does not seem to run such checks, it might be a hidden trap for you.

You might encounter a fraudster who might ask you to pay some fees to get instant access to funds. If you accept such offers, you will not gain anything ultimately, but you will lose money in the end.

Be ready to face high interest

Explore the lending market, and you will get to know how they are one of the most expensive loan options. You will have to pay higher interest rates than traditional loan options. If you miss a repayment, this contributes to mounting debts.

This is because the repayment will be of a short-term nature. Thus, if you cannot arrange the given amount within the short term, repayments will be delayed. Then, you will have to deal with accruing rates of interest and late fees.

Above all, the biggest setback will be faced by your credit scores. Even the rollover fees are going to be high, and these are charged when you fail to repay loans on time. Thus, if the approval seems like an easy catch, the long-term impact will be huge.

Poor credit borrowers are their target

These scammers know that anyone struggling with bad credit scores can be tricked easily. One of the biggest reasons is that these borrowers are rejected by many lenders. It is true that mainstream lenders are not going to accept poor credit scores.

Thus, lending options become limited for them. When they are urgently looking for financial assistance, such offers can easily misguide them. They might fall into the trap of getting 100% loan approval, which is not a reality.

Besides, someone looking for emergency funds can easily surrender to such offers. In this attempt, they might get ready to pay high interest. They seem to be in so much hurry that they tend to overlook the long-term impact of such offers.

No positive impact on credit scores

You might have heard how timely payment of loans can set the stage for better credit scores. Such things are not supposed to happen with these loans. As most payday lenders do not feel the need to update credit bureaus about timely payment, you cannot expect your credit scores to improve.

However, the reverse, i.e., late payments impacting credit scores, is possible. Thus, you cannot enjoy any positive effect of getting these loans. You must keep them as a last resort if other options are not accessible to you.

Finding a genuine lender is crucial

You can see such offers popping up here and there. The advertised proposal claims to offer you everything via a single loan deal. Many borrowers consider this a real offer and make the biggest mistake.

The best way to break the myth is by reviewing the background of the lender carefully.

The bottom line

Any other short-term loan option that you can obtain based on your affordability can be a good alternative. This is a suitable option to choose over guaranteed payday loans.

Emma Parker

Emma Parker is a financial counsellor at LondonLoansBank and has been serving for over 5 years. She is a psychology graduate from the University of Glasgow. Since she has keen interest in the finance field, she pursued a diploma course in banking and finance that led her to opt for her current career. She assists people choose the best loan based on their current financial situation and credit score. As Emma understands how people react to money problems, she gives them a helping hand to solve their financial complications.