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.
When a lender offers guaranteed approval, your initial thought might be: “when you apply, the lender will approve you, 100%, for whatever reason”. No-muss, no-fuss, just a guarantee that you’ll receive your loan in due time, right? Not quite. As 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.
Poor credit can hinder your ability to access credit and make it difficult for you to finance any major expense. With limited options, you may be wondering if you can get guaranteed approval loans for poor credit in Canada. While legitimate lenders do not guarantee approvals, that doesn’t mean you can’t get approved for a loan with poor credit in Canada.
There are many bad credit lenders who offer loans to those who have poor credit, but they often come with high-interest rates. That said, these lenders will generally approve you so long as you have a stable income and debt-to-income ratio that can afford an additional loan payment.
As mentioned above, there’s no way to guarantee approval for a loan, but there are many ways to increase your chances of qualifying for one. Essentially, you need to make yourself as creditworthy as possible and thankfully, there are several ways of doing this, including but not limited to:
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 scores and credit report. They do this to get an idea of how likely you’ll repay your loan payments on time and in full. While some legitimate lenders don’t check your credit, improving these elements is still a good way of gaining fast approval, as well as securing a lower interest rate.
Even if guaranteed approval is not really possible when you have bad credit or poor finances, applying for a“guarantor loan” can drastically increase your chances of securing a loan quickly. A guarantor loan 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.
Adding a cosigner greatly reduces the risk the lenders take, which generally translates to higher approvals and lower interest rates for the borrower. Moreover, 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.
Not only can bad debt ruin your finances, but it can also get your personal loan application rejected. While some lenders don’t require credit checks, the majority of them will evaluate your overall finances including your debt levels, particularly your debt-to-income ratio. If a high percentage of your income is used to pay down your current debts, lenders will likely reject you as it’s unlikely you’ll be able to afford another loan. 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.
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 low financial health), is to be patient and take the time to heal the blemishes in your financial profile.
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.
Many alternative lenders do what banks cannot do, provide loans to borrowers with bad credit. There are many advantages to 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, and 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: A bad credit lender’s 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.
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.
This is where credit users need to be cautious. In reality, no loan can truly be 100% guaranteed. Some “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.
Offering guaranteed approval is one way that scammers will try and take advantage of you. Here are a few signs that the lender you’re dealing with is a scammer:
When it comes to loan products, credit consumers may be looking for guaranteed approval for a few different reasons, including but not limited to:
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!
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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 travelling the world in search of the coolest sights our planet has to offer.
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