Getting some extra cash to help deal with pressing financial obligations is widely seen as the ticket to financial recovery. But for millions of borrowers with poor credit ratings to their name, getting an unsecured personal loan with bad credit is something of a challenge.
Approval is possible, and with the right application sent to the right lender, fast loan approval can even be secured. It might seem unlikely, but as long as your loan application is strong enough, and the sum of money being applied for is realistic, then getting the green light is a viable hope.
But as great as instant loan approval might be, it is important to be realistic relating to applications. Every applicant needs to satisfy the set criteria. Once this is done, then approval, even on an unsecured personal loan, is a target bad credit borrowers can realistically hope to attain.
The Problem With Unsecured Loans
There are many reasons why someone might want to apply for an unsecured personal loan with bad credit. Not least is the fact that, with no collateral required, the borrower does not run the risk of losing some item of value in compensation for defaulting on the loan.
But these loans have their disadvantages too, and the biggest problem is in finding a lender willing to accept the full degree of risk on the transaction. The fact that the applicant has a record of missing repayments, if not defaulting completely, means fast loan approval is practically out of the question.
Why is this the case? Because income is not always sufficient to see an unsecured personal loan approved. There usually needs to be something else to convince lenders that their investment is safe.
Getting Instant Loan Approval
It would be nice to think that the approval of your loan application is guaranteed, but this is not the case. If it were, there would be no need to meet criteria or to qualify; the cash would just be handed over. However, approval can be practically instant, even when seeking an unsecured personal loan with bad credit.
This is because the credit score is basically ignored by the lender when considering the loan application. With a no credit check process, there is no time wasted on double checking credit reports, so there is no need to wait for a decision. It can be given in seconds over the Internet, or in minutes over the phone.
There are several advantages to getting fast loan approval. For example, the interest rate and repayment terms are usually fixed. This makes budgeting much easier, which in turn makes meeting the repayments of the unsecured personal loan easier too.
Factors To Be Aware Of
It is true that instant approval is possible, and that is good news when seeking an unsecured personal loan with bad credit. But there are some other factors that should be taken into account. The convenience of the service, and the increased possibility of approval due to credit histories being ignored, both come at an extra cost.
The advantages of fast loan approval need to be weighed up against the fact that interest rates are usually higher. While a fixed rate means better budgeting, it also means that should rates in the market improve, your loan repayments will not change.
Also, loan limits are usually lower too. Couple with that the fact that the lender is accepting 100% of the risk in an unsecured personal loan, and it means the limit can be put as low as just $5,000. However, this is dependent on the lender, and what their lending policy is.