Guaranteed Installment Loans for Bad Credit | Do They Exist?

You may see commercials across the financial industry that use the word “guaranteed.” It is a comforting word for consumers to hear. However, the truth is that guarantees are often imaginary in the world of consumer finance.

Guarantees are hard to give when customers can have such a wide range of circumstances. For example, customers could have no credit and very little income. Another customer could have a decent income but a credit score below 500. Yet another customer could already have multiple personal loans to their name, and their credit utilization is maxed out.

Think about this issue from the lender’s perspective. Each borrower represents a certain amount of risk. Each lender has a limit on how much risk they will absorb. If a customer’s situation is deemed too risky, the lender will be forced to deny the loan.

That said, guaranteed installment loans may not exist, but some lenders, like Simple Fast Loans, are flexible with their approvals.

What to Look for in a Lender

Terms and requirements will vary from lender to lender and even from state to state, but a few basic necessities will be:

• Active checking account
• Verifiable income source
• Credit history

Now, lenders will likely be flexible in two out of three areas, but rarely will they be flexible in all three. For example, as we mentioned above, not having a checking account but having a good credit score might make up for it. Or, you may see lenders approve you if you have a consistent income source, like a regular 9-to-5 job, but your credit history is light.

Flexible lenders are willing to look at all the different aspects of your situation, which can make getting an installment loan getting approved almost a “guarantee.”

How to Improve Your Credit Score

If an installment loan lender does deem you too risky based on your credit score, there are some ways to improve your score.

The first thing you need to do is make sure you are paying your bills on time. Payment history is a huge factor in your score. Another tip is to make more frequent payments. For example, if your credit cards are high, consider making additional payments after you make your monthly payment. This will lower your balance and raise your credit utilization. Last, we recommend looking through your credit report and disputing any errors. It is best to dispute and remove any errors from your credit report. Any negative errors could drag your score down. Credit bureaus are required by law to investigate and respond to errors.

If you follow those three recommendations, you can add 50-100 points to your credit score. If you can raise your credit score, it could be a decisive factor in getting approved for that installment loan.

The Next Best Thing to “Guaranteed”

So, while guaranteed installment loans are mostly a myth, there are lenders out there that have incredibly high approval rates.

Some lenders boast approval rates of more than 90%. This is because they are flexible about requirements and will work with borrowers on a case-by-case basis. But, of course, interest rates and terms will also vary from case to case.

This latter point is essential to consider. Getting approved is only half the battle. You could get approved for that installment loan, but you may be in over your head when it comes to paying it back plus interest.

So, before you sign your name on the dotted line for that installment loan, ensure you understand all the terms and can afford the monthly payment. Lenders will stretch the numbers to get you approved, so you can do your part and make the payments on time.

Final Thoughts

A guaranteed installment loan is not possible for every person. However, there are plenty of lenders who are willing to work under a variety of circumstances. This case-by-case approval process can be almost as good as a “guarantee.”

However, it may be best for potential borrowers to examine their credit scores. Ensure it shows on-time and frequent payments where possible, and address any errors. A solid credit score can make a big difference if you are on the border of not being approved.