Here’s Why You Should Avoid “Guaranteed Approval” Bad Credit Loans…January 08, 2020
No credit check loans with guaranteed approval can look like the perfect solution when you have bad credit and need cash fast – but you know what they say, if it sounds too good to be true, it probably is. Even if you have bad credit, there are better alternatives when you need fast cash…
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Getting a quick bad credit loan can be difficult and downright frustrating. The a good credit score in Canada is 660, yet most traditional banks won’t even lend to you if your score falls just below that.
The good news is it’s still possible to borrow money with bad credit, you just have to know where to look. Online lenders are growing in popularity and have the technology to issue same-day funds to give Canadians the financial assistance they need when banks fail to help. The bad news? Not all of these lenders have your best interests at heart, especially the ones offering bad credit loans with guaranteed approvals and no credit checks.
What are the risks associated with guaranteed approval loans for poor credit?
Lenders with guaranteed approval loans are known for their predatory behaviour. They target individuals in desperate situations because they know these types of borrowers are more likely to take on bad credit loans with high-interest rates, unreasonable payment terms, and excessive fees.
No credit check loans are very tempting. However, although a credit check can lower your credit score, not getting one can cause even more financial trouble down the road. Lenders who don’t do credit checks often approve loans much larger than what borrowers can afford, which causes them to wind up in a vicious cycle of debt.
Guaranteed approval loans are one of the most common sources of loan fraud too. Shady lenders will promise to give you money so they can collect fraudulent upfront fees. You can prevent yourself from becoming a victim by avoiding these kinds of bad credit loans.
What’s the easiest and safest way to get fast cash with bad credit?
An installment loan from a credible lender is the way to go if you have poor credit and need money quickly. This type of loan is much better than a guaranteed approval or no credit check loan because it offers extended repayment periods, lower interest rates, and predictable monthly payments.
Installment loans can also boost your credit score – something that’s not possible with a payday loan and other bad credit loans. As long as you have a healthy mix of debt, keep your credit utilization low, and consistently send your payments in before the due date, an installment loan can help you build credit so you can achieve financial stability.
How do I find a trusted online lender?
Predatory lenders and online loan scams are more prevalent than ever so it’s important to do your research before you apply for a personal loan. One of the best ways to identify a reputable online lender is by looking at reviews on third-party websites like Trustpilot. Negative reviews and even a lack of reviews provide valuable insight into whether a lender is legitimate or not.
You should also be aware of red flags such as:
- Upfront fees: Stay away from lenders who say they will loan you money if you pay an upfront fee first. This practice is illegal in Canada. It’s also the most common type of loan scam as fraudsters collect the advance fees and then disappear.
- Sky-high interest rates: You know you’re dealing with a predatory lender if they charge three-digit interest rates. Payday loans are notorious for this and often have astronomical annual percentage rates (APR) of up to 599%.
- Hidden fees: A responsible lender will always be upfront about the total cost of a loan and never sneak in add-on services or hidden costs like application fees or charges for poor credit.
- Pressure to accept an offer: Reviewing all the terms and conditions is a must before you agree to a loan so beware of lenders that pressure you into signing or tell you to skip reading the fine print. If a lender insists on rushing paperwork, it could indicate the contract has hidden fees or unfair terms.
- No income verification: No credit check lenders who fail to ask for proof of income or employment are not responsible lenders. In most cases, they approve you for a loan that’s much more than you can afford so you’re stuck paying high-interest fees over a longer period.
- Lack of contact information: If you can’t speak with a live customer service representative or find a physical address for the business, run! It’s a sure sign the company is fake.
Say no to risky bad credit loans
With Spring Financial, you don’t have to resort to guaranteed approval loans. Unlike predatory lenders, Spring Financial is a trusted, responsible lender that will take the time to understand your borrowing needs and help you secure a loan you can afford. Although Spring Financial cannot guarantee approval, it does offer many benefits designed to help you succeed financially such as reasonable interest rates and flexible repayment schedules.
Why choose Spring Financial:
- Installment loans of up to $35,000: From covering unexpected expenses to funding your dream wedding, an installment loan can be used any way you like. The best part? You can get approved from the comfort of your home.
- Fast cash: Thanks to advanced technology, Spring Financial can deposit funds on the same day or within 24 hours of applying.
- Credit-building opportunities: Boost your credit score by making loan payments on time – it’s something you just can’t do with a payday loan.
- Safe alternative compared to other lenders: Spring Financial is not a payday lender and is trusted by Canadians across the country. See what they have to say on Trustpilot and Feefo.
- Reasonable interest rates: Lower interest rates make it easier to manage your loan and prevent you from getting trapped in a cycle of debt.
- Flexible payment plans: Select a longer term to make lower monthly payments or a shorter one if you want to pay your loan back as quickly as possible.
- No hidden fees: Never pay a dime in application fees, maintenance charges, and other hidden costs.
- Responsible lending: While Spring Financial does perform credit checks, it also considers other key factors like income and employment to get a complete picture of your finances.
- All credit situations considered: You can get approved even if you have bad credit, are new to credit, or have filed for bankruptcy.
Spring Financial is here for you
Say goodbye to costly ‘guaranteed approval’ loans forever. Even if you have bad credit, trusted lenders like Spring Financial are here to help you with your financial goals. Apply for an installment loan online or speak with a live agent at 1-888-556-6441 to get started.