There is no doubt that accumulating loan debt can be a daunting task. However, with the right knowledge, it should not be much more difficult to find loans for people with less than perfect credit. This article explores the various Guaranteed loans for bad credit direct lender options that are available to borrowers like you, regardless of your credit score.
Before exploring those options in detail though, this article will provide an extensive explanation of what type of loans people have access to when their credit scores fall below target. Specifically, this article will outline which types of loans these borrowers are eligible for and will also discuss what option is best suited for them based on their unique needs and circumstances at hand.
The types of loans and how to qualify for them
There are several types of loans that a person can apply for. Some of those options are guaranteed and some are not guaranteed. As outlined in the table above, there are flexible, unsecured and secured loans available to borrowers like you. While securing a loan is important, it is not always necessary. That being said, there will be additional costs associated with a secured loan which may make it cost-prohibitive for many consumers.
Fortunately, there is an option out there that will work well for almost everyone who applies: the unsecured loan (the column labeled “Other Unsecured Loans” in the table above). Keep in mind that if the borrower is denied a secured loan, they may still be able to qualify for an unsecured loan. The only difference is that the rates on these loans will be higher because of the higher risk associated with not having collateral on hand.
Guaranteed and Unsecured Loans
For the most part, these are two of the same thing. In fact, they are identical in many ways. The only difference is that with a guaranteed loan, the lender will provide some sort of guarantee to help ensure that the payments are made on time.
That guarantee may come in a variety of different forms: it could be income-based or it could come in a form of collateral that is provided by the borrower. Since both of these loans provide a sense of comfort for the lender in terms of repayment, expect to pay more for them than you would for unsecured loans. However, these costs are worth it for most people since their credit scores are in such poor shape.
The forms of collateral that the borrower will use to secure the loan are outlined below. More often than not, these collateral options may be used multiple times over by borrowers to access more money down the road.