In this modern era, the lending market has become quite competitive. There is nothing wrong in that because the demand for extra funding access has been on rising from the people. Such things bring both positive and negative for the lenders. For example, the growing demand of the loans is proving productive for their lending business, but on the other hand, they are not able to give guaranteed approval on the borrowed amount. Therefore, few creditors have brought out a middle option called guaranteed loans.
The concept of guaranteed loan approval is actually working in favour of the borrowers, who are not sure about the approval on their loan applications. If they can prove their ability to repay the borrowed funds, the lenders have no hesitation to offer them guaranteed approval because they have the collateral to repossess in case of borrowers miss the repayments.
There is a reality that no lender can give guaranteed approval on the loans and if someone is doing the same, it has to prove its creditworthiness among the concerned authority. In particular, the online lenders are advertising their products with the guaranteed approval. Some of them may be real in their lending terms, but maximum are only doing promotion of their finance products. However, here are the consequences that guaranteed loans bring for the different types of borrowers:
For Students:
Pursuing study with no scarcity of money is more or less impossible. At some point of time, the students have to face the financial problems where the funds that they are receiving from their parents are not sufficient. In such cases, if their parents are able to secure some assets or having a responsible person as the guarantor, they can borrow funds through the medium of guaranteed loan approval. With the borrowing funds, they can pay out their university fees or can purchase the study materials or any other requirements.
For Bad Credit:
People with poor credit history are more vulnerable for the guaranteed approval. It is because they have nothing to show their repayment history and they are actually the risky borrowers for most of the creditors. But nowadays, the scenario has changed a bit where the borrowers having limited FICO score can also seek for the guaranteed approval. However, they have to show the guarantor or they must have collateral to submit. By availing these loans, they can also improve their credit scores.
For Businesses:
The online loans on guaranteed approval are also available for the businesses. If you have a guarantor in your side, you can ask for the large funds that can boost up the finances of your enterprise. However, it is really important to request for only that amount that you think can be repaid later. If you miss the repayments, then the credit score of your business will get worse and no lender would agree to fund you in the future.
Thus, guaranteed loans have the features that can bring positive consequences for the different borrowers with different financial problems.
