There are chances that you are looking for ‘guaranteed approval’ bad credit loans for personal reasons. This ‘guaranteed approval’ offers some kind of hope to the borrower, even if he/she has a bad credit score due to flawed reasons.
Finding a Guaranteed Approval Bad Credit loan
You need to be aware that there is no ‘guaranteed approval’ for any type of loan. This is because the lender, before any approval, assesses all the applications for loans. There are lenders who offer loans for bad credit but in no way, are they guaranteed.
Different lenders have different criteria for eligibility.
- Capacity to make the Payments:
The debt-to-income ratio gives the lender a clear picture of whether you are capable of making the payments of the loans or no. The lender needs to have the knowledge of your income besides making sure of your employment.
- Credit History:
The credit history reveals how the payments in the past are made. This also reveals if the payments are on time or you have defaulted or opted for late payments. If this history shows that you have been repaying the loans well before time, means that the lender can trust you with the required loan.
- Information on the Capital:
This reveals the number of funds you have when you are applying for the loan.
- Collateral required:
There is a possibility of you having to give collateral for the required loan. The lender needs to know all the information on the different assets you have, that is used as a security for the loan.
- Different Conditions:
The conditions mean the lender needs the information on the reason why the loan is required and the amount required. The lender will also need an explanation on how you will repay the loan.
You need to be aware that a promise of the ‘bad credit loans guaranteed approval’ is a scam most of the time. You need to be cautious and not fall for this.
Finding Lenders for Bad Credit Borrowers
If you are looking for a bad credit loan, it is important to be prepared with specific documents.
- a) Your Credit Report:
This is the basis of your credit score and you can get this from the credit bureaus. You can get this report once a year. It is advisable to go through this and ensure there are no discrepancies. These can make a difference to your credit score.
- b) Proof of Employment:
It is important to have enough income when you are looking for a bad credit loan, as a loan is repaid at one time or another.
- c) Debt-to-income Ratio:
The debt-to-income ratio is a comparison made of the debts you have been making payments for each month and the amount of income you earn each month. A low debt-to-income ratio works well when you are looking for a bad credit loan.
Besides the above mentioned, you also need proof of age of the applicant, work experience along with the occupation, sources of any surplus income, and a reason for asking for a loan.
