Living life sans loans seems to be all but impossible in the world of high living cost. Even though you build up the attitude of expect-the-unexpected in you, your wallet often runs out of money, which is why you turn to direct lenders.
If you understand in a layman language, the loan is just an amount you can borrow based on your repayment capacity as and when you need it. Still, the market is full of various types of loans claiming ideal for a different situation, making people bewildered.
One of the most common loans that confuse a majority of borrowers is guaranteed loans for unemployed. As the name suggests, these loans aim at helping the unemployed as long as you have a side gig to pay off. Many borrowers think that guaranteed loans and doorstep loans are the same as the latter aims at the unemployed too, and it can be interchanged with guarantor loans.
Since the essential difference is not clear, most of the people fall in a debt trap. Now you do not need to get confused between these terms because here is the Real Story explained.
Guaranteed unemployed loans are different from doorstep loans
Doorstep cash loans enable a lender to deliver you money at your home. The disabled, the unemployed and the retired are eligible to apply for home credit loans, but they do not act like a guaranteed loan.
Lenders have provided door-to-door facility to the unemployed because there is a possibility that you do not have a functional bank account at the time of putting in the loan application. Some people usually have salary accounts, and as they lose their employment, it becomes dysfunctional.
In the absence of an account, it cannot be possible to transfer money and pull funds on the due date. In this scenario, you can choose a cash-at-door facility.
A representative of the lender will visit your home, look over your financial condition to decide a disbursal limit and then approve of the application if everything goes fine.
However, there is no guarantee that you will get funds. If they are sceptical about your repayment capacity, they will deny lending you money.
To avoid rejection, you should apply for guaranteed loans for the unemployed. Here is how these loans are different from doorstep loans:
- You must have a functional bank account.
- Unlike doorstep loans, you do not have to pay visit fees.
- You will get better interest rates.
- The approval rate is as high as 99%.
Guaranteed loans and Guarantor loans are two different things
Guaranteed loans indicate guaranteed approval and guarantor loans require a guarantor, who will be obliged to pay off the debt if you fail to do so. It involves friends, relatives and anyone of your acquaintance.
A lender will require you to arrange a guarantor if your credit rating is poor and your financial condition does not look credible enough to bear the loan. Many lenders claim to provide guarantor loans at lower interest rates, but the reverse is the reality. Your poor credit rating serves the basis for charging high-interest rates even though you arrange a guarantor with a good credit history.
The guarantor acts like security or collateral that can be called upon by the lender when you fail to meet your obligation. Guarantor loans can be as damaging as payday loans for guarantors. Lurking dangers are discouraging people from acting as a guarantor.
Reliable direct lenders understand that arranging a guarantor is quite tough when you need money urgently because nobody would like to take on your liability, which is why they provide loans on guaranteed basis. These loans do not require you to arrange a guarantor; neither you need to arrange collateral.
Can you apply for guaranteed loans in case of poor credit?
You know that you need 100% approval loans in case of a poor credit rating, but it does not mean that you cannot take out guaranteed loans. Prominent direct lenders emphasise your repayment capacity instead of credit history. They will not turn down your application as long as you prove your repayment capacity.
Guaranteed loans for unemployed are the best way to fund your needs during a temporary job loss. Even though your credit score is less-than-perfect, direct lenders like A One Finance will lend you money provided you can repay the debt.