How To Get Guaranteed Approval For A Personal Loan

How To Get Guaranteed Approval For A Personal Loan

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated November 3, 2021

As you search for the right personal loan, you may be wondering if any lending institutions, banks, or otherwise, offer guaranteed approval? While many of these companies may advertise such a benefit, make sure you do your research before signing on the dotted line as there’s more to guaranteed approval than meets the eye.

What Does “Guaranteed Approval” Mean?

As simple as the notion of “guaranteed approval” sounds, it’s a bit more complicated than that. When a lender offers guaranteed approval, your initial thought might be: “when you apply, the lender will approve you, 100%, for whatever reason”. No fuss, no muss, just a guarantee that you’ll receive your loan in due time, right? Not quite. Like we said, it’s very important to take this idea with a grain of salt. Legitimate alternative lenders like Mogo will never guarantee approval or advertise guaranteed approval. Unfortunately, there’s no way to receive 100% guaranteed approval. All you can do is take the proper steps to qualify. 

Decided against a personal loan? Read about other loan types for credit users.

Why Do Consumers Want Guaranteed Approval?

When it comes to loan products, credit consumers may be looking for guaranteed approval for a few different reasons, including but not limited to:

They Have Poor Credit

No matter what the cause of a consumer’s bad credit is, a low credit score can make it extremely hard to get approved. While they can sometimes qualify with a bad credit lender, their interest rate could be through the roof, which may lead to debt problems down the line. 

They Don’t Want Their Credit Checked

Some consumers have negative credit histories, some want to avoid hard credit inquiries (which damage credit scores), and others don’t have any credit history at all. Whatever the reason, certain consumers may not want their credit checked. If a consumer has applied for multiple loans, all within a short period, multiple hard inquiry notices will show up on their credit report and remain there for several years. These inquiries might raise red flags for other lenders in the future. So, if “guaranteed” approval is offered, many consumers may jump at the chance.

Why Guaranteed Approval For Poor Credit Is A Scam

This is where credit users need to be cautious. In reality, no loan can truly be 100% guaranteed. Some supposed lenders may offer this, but beware! They may be scam artists who prey upon those desperate for loans. Scam artists are getting more creative all the time. They can be extremely convincing, so it’s important to do research when comparing lenders in Canada.

Additional Ways To Spot A Loan Scam

Offering guaranteed approval is one of, if not the main way that scammers will try and take advantage of you. There are also a few other telltale signs of a scam in the works:

Loan Insurance

One way that scammers try to manipulate you is by bringing up the idea that they’re risking something by taking you on as a client. This is true, in a sense, because there is always a chance that a consumer can’t afford their payments. Where the situation becomes a scam, however, is when they demand an advanced payment in exchange for the “risk” they’re taking. They’ll probably call it “loan insurance” and will say it’s a mandatory fee for them guaranteeing approval.

Look here for a more detailed explanation of loan insurance.

They Try To Pressure You Into Applying Immediately

All legitimate loan sources need to abide by the laws that govern the lending industry in Canada. One of these strict regulations is that no legal lender is allowed to use forceful or threatening language, or pressure you to surrender your personal or banking information. There is no rule that says you must apply for a loan that you don’t feel comfortable about.

Their Payment Methods Are Suspicious

Most lenders will offer a few different ways that you can pay back your loan. However, it’s very important to never give a suspicious lender access to your bank account. It’s also best to avoid paying using a prepaid credit card since they already have cash on them that a scammer can steal. Once again, they may even offer you guaranteed approval and the price will, of course, be to give them direct access to your finances. 

The True Cost of BorrowingHave you ever wondered what the true cost of borrowing is? Check out this infographic

What To Do If A Lender Guarantees Your Approval For A Bad Credit Loan?

Remember, no legal lending organization will offer you a 100% approval guarantee. If they do, they may be trying to scam you. Don’t give them any information, walk away and report them to the authorities. Most police departments in Canada have a department dedicated specifically to cases of fraud, identity theft, and other financial crimes. If you’ve already given away your personal or financial information, contact the right companies to have said information modified. Cancel your credit cards and request new banking data. If you can prove your SIN has been used fraudulently, you can even contact the closest Service Canada office to have your number changed and protected. If you think your credit report may have been compromised as well, contact both of Canada’s credit reporting agencies (Equifax and TransUnion) and have them place a fraud alert on your profile. You can even purchase their credit monitoring service, which will keep you updated and alert you of any suspicious activity in your account.

How To Increase Your Chances Of Getting Approved With Poor Credit

While the no-questions-asked type of guaranteed approval is a myth, there are things you can do to work your way to the point when approval is nearly instant. Essentially, you need to make yourself as creditworthy as possible. There are many ways of doing this, including but not limited to:

Building, Fixing, And Improving Your Credit Health

Again, this can take a lot of work, but it will be worth it in the long run. One of the main factors that your lender might examine is the health of your credit, namely your credit score and rating, as well as your payment history. They do this to get an idea of how trustworthy you’ll be with your potential loan payments. While some legitimate lenders don’t check your credit, improving these elements is still a good way of gaining fast approval, as well as a lower interest rate. You can improve your credit health by:

  • Making timely, full payments for all your outstanding credit products
  • Reducing your debt-to-income ratio to 30-40% maximum
  • Reducing your credit utilization to 30-35% of your available credit
  • Reviewing your credit report at least once per year and disputing any errors you find that could be damaging your credit score

Read this to learn more ways of improving your credit health this year.

Reducing Your Debt Level

Not only can bad debt ruin your finances, but it can also get your personal loan application rejected. Despite the fact that some lenders don’t check credit, the majority of them at least look at your financial profile, including your income and your debt history. For obvious reasons, no legitimate lender will grant approval if you already owe money all over town or have a record of defaulted loan payments.

Looking for some tips on how to manage your debts? Check these out.  

Apply For A Guarantor Loan

Even if guaranteed approval is not really possible when you have bad credit or low financial strength, applying for a“guarantor loan” can drastically increase your chances of securing fast financing, rather than having to wait until your finances have improved. The process involves finding someone with good credit and financial strength to co-sign your loan application, thereby agreeing to take on the responsibility of your loan payments in the event that you can no longer afford them.

Make sure they’re aware of this fact because if you end up defaulting, they will have to take on your debt which may cause severe damage to both of your financial profiles. That being said, guarantor loans can be beneficial when you’re looking for near-instant loan approval, as your own credit and finances will not be an issue. Instead, your guarantor’s financial aptitude becomes the deciding factor.

Canadian Credit ScoreTake a look at this infographic to learn more about how the credit bureaus calculate your credit score.  

What To Do When You Need Access To Fast Cash

The time it takes to gain approval and receive your personal loan depends on your own financial fortitude, as well as your lender’s borrowing procedures. For instance, banks, credit unions, and other prime lenders have policies that prevent them from lending to those who don’t have great finances. Additionally, it often takes well over a week for them to let you know whether you’ve been approved, depending on the type of loan you applied for. Even a simple credit card through a typical banking institution can take weeks to get approved for and acquire by mail. So, if you apply with a prime lender, the best possible thing you can do (if you have bad credit and a low financial health), is to be patient and take the time to heal the blemishes in your financial profile.

There may be some secrets your bank is not telling you. Click here to read about them.

Choose The Right Type Of Lender

Then again, what if you don’t have that kind of time? What if you need to cover a pressing expense, such as your rent, tuition, or utility bills? If that’s the case, it might be better to apply with a private or alternative lender. While having a co-signer or other such elements will speed things along and increase your approval chances, choosing the right lender is definitely an essential part of getting fast access to personal loans.

Take a look at some more ways to borrow money fast.

Try Bad Credit Lenders

Many alternative lenders do what banks cannot do, provide loans to borrowers with bad credit. There are many advantages in applying for a loan with a bad credit lender. 

Versatile Requirements: Unlike banks that put a great emphasis on credit scores, bad credit lenders consider a number of different factors to determine an applicant’s eligibility. Income, employment stability, debt-to-income ratio are some other factors they will base your approval on.  

Easy Application: Traditional banks require a lot of unnecessary paperwork that can make the loan application process a nightmare. But bad credit lenders are designed in a way to get you cash when you need it. Applications are often very simple and can take 5 to 20 minutes to complete. 

High Approval Rates: Bad credit lenders whole business relies on providing loans to borrowers with less than perfect credit. As such, their approval rates are much higher than traditional banks. 

Build Credit: When you have bad credit, it can be hard to rebuild your credit because the banks are not willing to provide you with any credit products. Bad credit lenders give you the opportunity to rebuild by giving you access to different credit products. 

Guaranteed Loan Approval FAQs

Will bad credit affect my loan approval?

In certain ways. Mostly this depends on your lender. For example, banks and other prime lenders have tighter lending regulations, so your bad credit may prevent you from getting approved there. However, if you apply with a private, alternative, or bad credit-specific lender, your chances will be higher.

Can I get guaranteed approval with no credit check?

As we said, there is no such thing as guaranteed approval. However, there are legitimate lenders out there who do provide personal loans without checking your credit as part of their application process. You can also apply for a guarantor loan, wherein the credit of your co-signer/guarantor will be checked in your place. Want to know more no-credit-check loans? Check this out.

I need a loan right away. Can I get instant approval?

Remember, there’s a big difference between the promise of personal loan guarantee and instant loan approval. Anyone who vows 100% approval, no matter what, is probably a scam artist. However, if you apply with the right lender, same-day approval is surely possible. Afterward, you won’t have to wait more than 1-2 business days to receive your funds.

How much money can I get approved for with poor credit? 

In general, most lenders provide personal loans between $500 to at most $35,000 to borrowers with poor credit. However, the amount of money you can get when you have poor credit depends on who you apply with and how well you meet their requirements. 

How do I guarantee the approval of my bad credit personal loan?

  Your approval is based on how well you meet the approval criteria set by the lender you apply with. No legitimate lender will guarantee you a loan without assessing your capability of paying back the loan. You can only increase your chances of being approved by improving aspects of your financial profile. Click here to find out how. 

Need Fast Loan Approval? Choose Loans Canada!

If you’ve been looking for speedy personal loan approval without success, don’t worry, because you’ve found Loans Canada! We guarantee good service and a rapid connection with the right lending sources for your financial needs. Contact us today!

Rating of 5/5 based on 4 votes.

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and traveling the world in search of the coolest sights our planet has to offer. Bryan uses the BMO Cash Back Mastercard to earn cash back on everything from boring bill payments to exciting excursions. He is also a strong saver, holding both a TFSA and an RRSP account in order to prepare for his future while taking full advantage of tax benefits.

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