All About Guaranteed Personal Loans

Most people deal with the usual big expenditures in their lives which involve buying a house or going to college by taking out a housing loan or a student loan. What about the smaller occasions which are more personal in nature, such as holiday expenses, wedding arrangements, or buying new furniture for the house? Sometimes we may not have the necessary finances at hand to immediately pay for an upcoming personal event. Guaranteed personal loans can be way out in such cases.

Familiarising ourselves with the concepts of personal loans can help us decide whether to opt for guaranteed personal loans.

Suppose you'd like to visit your children or relatives who live in another country for a special occasion. Your immediate finances show that you do not have enough money to make this trip. Or you may have to spend money for the wedding of one of your children or to buy jewellery. It may even be a case of medical treatment, when your medical insurance fails to provide adequate coverage.

Guaranteed Personal loans can solve your expenditure dilemmas.

However, personal loans should be thought of only when you have the confidence of repaying the loan amount along with interest within the stipulated time.

You may apply for personal loans even if you have savings in the bank, which you may not want to touch. Or you may not have any savings at all.

If you have a bad credit history, that is you have a record of loan defaults and late payments, it may be harder for you to find a personal loan provider or to seek a guaranteed personal loan. While it is harder, it is still possible.

There are different types of personal loans available, based on the guarantees and collaterals involved. The type of personal loan you apply for, such as a guaranteed personal loan or an unsecured loan, may depend on your financial situation and credit history.

What are Guaranteed Personal Loans?

Most personal loans tend to be unsecured - that is they do not need any "security" or asset to be provided as collateral for the loan. Guaranteed unsecured loans rely on your proof of income and credit history for loan eligibility.

Guaranteed personal loans are those in which a third party stands as guarantor for your loan. In the case of student loans or small business loans, often the government or public organisations may act as guarantor of the loan. An example would be federally guaranteed student loans.

For personal loans, a friend or relative can stand as guarantor for your loan. In case of default of loan payment by you, the guarantor will be asked to pay. The guarantor may also be a party such as a specialist lender, which provides a guarantee in exchange for a fee. A loan guarantee may have restrictions such as time limit of guarantee or percentage of loan covered by a guarantor.

Guaranteed Bad Credit Personal Loans

For people with a history of bad credit, such as bankruptcies, loan defaults and late payments, it is more difficult to get personal loans. However, some lenders and lending firms do specialise in providing guaranteed bad credit personal loans to people who would otherwise not qualify for loans from traditional sources.

A person with bad credit history poses an element of risk to the lender. There are higher chances that the borrower may default on the payment due to the lender. To offset this risk, a lender who specialises in bad credit personal loans charge higher interest rates than normal and may also impose stricter terms and conditions.

Cash advance or Pay Day loans are a type of high interest and high risk personal loans which are unsecured and of short term. These types of unguaranteed or guaranteed high risk personal loans dispense with the need for credit history checks. Due to the brushing aside of bad credit history of the borrower, pay day loans tend to be very expensive in terms of interest rates. Sometimes borrowers with a bad credit history who apply for Pay Day loans fall into more debt as they are unable to pay back the amount along with the high interest rates. Some financial analysts have even debated whether personal loan types such as Pay Day loans should be banned.

Guaranteed Online Personal Loans

The Internet is the vibrant place to shop for personal loans with various lenders vying with each other to provide personal loans of all types. Guaranteed online personal loans providers promise quick loan approvals at attractive rates. Bad Credit? No problem! Numerous online sites offer credit for exactly such kind of borrowers and offer instant personal loans guaranteed.

Apart from specialist lending firms, traditional lending sources such as banks and reputed financial organisations also offer guaranteed personal loans through their websites.