Guaranteed Approval Bad Credit Personal Loans: Here’s What You Need to Know

by Susan Paige
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Lenders look at different factors before they approve a loan application of a borrower. For example, the borrower should have a passing credit score to obtain the loan. A credit profile with impeccable credit payment history means that the borrower is low-risk. A borrower with credit history filled with late payments, on the other hand, is considered high-risk. 

If you’re a high-risk borrower – meaning your credit score is not good – you should go to non-traditional lenders to borrow money. For example, you can apply for bad credit personal loans guaranteed approval direct lenders for that purpose. Applying for this loan type gives you the opportunity to borrow some cash despite your below par credit score. 

For you to understand how bad credit personal loans work and to answer other questions concerning this loan option, read on below. 

Is a Guaranteed Approval Bad Credit Personal Loan Legit?

The phrase “guaranteed approval” in guaranteed approval bad credit personal loans can really attract people to get this loan. However, it may not be guaranteed at all because you’ll still be subject to a soft credit check. But the processing of your loan application indeed takes less time than bank or credit union loans. 

Lenders that provide bad credit personal loans are not too fussy with your credit score. What matters most to them is your employment status and monthly income. Even if you have made credit mistakes in the past and your credit score is below the passing grade, you still have a chance to secure this type of loan. 

Yes, this loan option is legit, and there are some benefits to it. Still, it’s a must to take extra precautions when applying for bad credit personal loans because there are unscrupulous lenders and scammers out there. 

You should avoid lenders that charge interest rates above the regulatory limits. It’s also crucial to stay away from the ones that ask for expensive upfront fees. 

When applying for bad credit personal loans, make sure to research the lender’s background. Ask for a business or credit license, check reviews on the web, and go to websites such as Better Business Bureau to find if the lender is trustworthy. 

Where to Apply for This Loan Option?

Now let’s find out where you can obtain bad credit personal loans. There are three options if you need to apply for this loan type. Read on below for you to find out. 

Direct Lenders

Direct lenders are the go-to source of bad credit personal loans. When you apply for this loan type via this source, it means that you go straight to the lender. The lender will process your loan application, assess your qualifications, and send the money to your bank account directly if you’re approved. 

A lot of direct lenders that provide bad credit loans operate their service online. Such lenders can fit into the categories of non-traditional and traditional lenders. You can also consider banks and credit unions as direct lenders. 

Loan Aggregators

While direct lenders work with borrowers directly, loan aggregators match loan borrowers with the lenders. In other words, loan aggregators work in partnership with different lending companies. 

Whenever you apply for a loan, your loan application will be sent to different lenders for evaluation. So, there are multiple lenders that will peruse your qualification, and it’s advantageous because your chances of getting the loan are high. Not qualifying for one lender isn’t the end of the journey since another one might approve your loan application. 

P2P Lenders

Peer-to-peer lenders also offer loans for borrowers with low credit ratings. So, P2P lending operates through a peer-to-peer network, meaning that it’s online. 

You register with a P2P platform, send your loan application, and you’ll be matched with various lenders in the network. It’s a very non-conventional way of lending because even non-bankers or non-lenders can provide loans to borrowers. 

When it comes to obtaining a bad credit loan with an advantageous term and interest rate, you have more chances to avail of that one through a peer-to-peer network. Still, you must be wary of fraudulent peer-to-peer networks that steal personal identities and put your confidential information and money at risk. 

How This Loan Type Affects Your Credit Score?

Lenders that provide bad credit personal loans send reports whether you’re a good loan payer or not to major credit bureaus. So, yes, this loan type can either make or break your credit score. 

Be responsible when paying a bad credit personal loan to boost your credit score. You should see to it that you pay it on time. Otherwise, your credit score will decrease. 


Go to a non-traditional lender if you have a bad credit score and you want to borrow money. Direct lenders, peer-to-peer lenders, and loan aggregators offer bad credit personal loans for people in your financial position. Read the guide above to understand more about bad credit personal loans. 

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