Are you suffering from bad credit? Having trouble making all your monthly payments? Does your credit report show a lot of charged off debt? There are ways you can start to rebuild and improve your credit. One way is with a bad credit loan. Here are some tips to keep in mind as you shop for the right loan.
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A Guaranteed Approval Loan – What is it?
A guaranteed approval loan is also known by other names such as “fast loans”, “quick approval loans” or “bad credit loans”. These are short term loans that provide financial assistance for those who need it in a hurry.
Most of these loans are tied to some sort of collateral. The most common type for consumers can be tied to your paycheck, if you are a business it can be your merchant account. There are also loans secured by real property such as your car, real estate, or other tangible property.
What Are The Requirements For Approval
Even if you have bad credit, you can still get approved as long as you meet the necessary requirements. The requirements are not at all complicated. Specific requirements may differ from one lending company to another but generally, lenders require an applicant to be:
- of legal age (over 18)
- have stable job or source or income
- an active bank account.
- some form of collateral (ex: real estate, car or pay check )
Credit isn’t an issue for these companies because of the collateral. And that’s why some of them advertise their loans as a guaranteed approval loan. In fact, these loans are especially offered for people with imperfect credit history and for those who have not yet established credit history.
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How To Use A Guaranteed Approval Loan To Rebuild Your Credit
Can a guaranteed approval loan help you rebuild your credit history? Yes.
Even though these loans are secured, they show up on your credit report and act as a “vote of confidence” to other lenders that you are now credit worthy. The trick is to make sure that you make all your payments on time! Even 1 late payment will not only cost you a lot in late fees and interest, but it will put your collateral used in danger of repossession and show up on your credit report that you are once again starting to pay late.
If you took out a payday loan, then can quickly snow ball into a financial disaster! Payday loans should only be taken out in EXTREME emergencies. You should read the fine print about how long you have to repay the debt. Some of them are as short as 2 weeks with huge penalties if you don’t pay it back in 2 weeks. Some are as long as 3 – 6 months.
How to Obtain A Guaranteed Approval Loan
If you search the internet for guaranteed approval loans, you can find a long list of online lenders. Most of these loans you can apply for online and get an approval usually within 2 – 24 hours depending on the lender.
Nevertheless, even if it’s easy to get approved, a borrower must spend time exploring his options before making a choice. Take note that there are also fake lending companies and predatory lenders in the market. To avoid getting ripped off, you should do careful research and compare potential lenders.
Also, remember that each lending company has its own rates and fees. Some may impose unreasonably high interest rates on their customers. If you won’t take time comparing lenders, you could easily end up with the wrong company.
Don’t forget to check the history and background of the lending company you’re considering. You may also check from the Better Business Bureau if company there has been any complaint filed against the company.
About the Author
Melanie Mathis is a credit analyst and an assistant writer of Liz Roberts for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended personal loans for people with bad credit.