Guaranteed loans provide credit to applicants without considering their credit score or affordability to repay. Such loans are similar to no credit check loans, but they do not consider any creditworthiness or affordability checks in their lending decisions. This makes them an easy acceptance option, particularly for borrowers in desperate need of financial help.
However, the problem with guaranteed acceptance loans is that they pose a higher risk of default rates due to their acceptance of all applicants. Furthermore, they do not have any processes in place to assist customers in avoiding loan defaults, which is not in line with responsible lending guidelines. If a borrower fails to make a payment, the lender may not be able to help arrange alternative payment methods. It is highly unlikely to find a guaranteed loan lender approved by the FCA in the UK.
When faced with a financial emergency, borrowing money through proper channels may not be as appealing as it involves the risk of rejection. Loans for bad credit with guaranteed approval, in particular, are difficult to get accepted. Nonetheless, guaranteed bad credit loans should not be the go-to option in the UK as same-day loans are available without compromising on the correct procedures. Borrowers with poor credit scores may find UK guaranteed loans for bad credit tempting, but they should consider whether a lender who offers guaranteed loan approval has their best interests in mind.