You must have come across some lenders claiming to provide 100 percent approval loans. The impression you get when you come across this term is that there is no chance of being rejected, no matter what. Unfortunately, this is not the fact. No lender can give you a guarantee on the approval. When you apply for a loan, a lender will need to check your credit score and repaying capacity. Of course, they will refuse you a loan if they find that you cannot afford to pay it back for any reason.

A registered lender cannot use such bogus terms to advertise their loan products. They have to strictly stick to the FCA (Financial Conduct Authority) guidelines. In fact, no lender can give guaranteed approval on a payday loan that does not include a hard check. The lending decision is made based on the financial details you provide in the application form.

If lenders suspect that the debt will put a burden on your pocket, they will certainly turn you down. So, the fact is that no lender can give you 100% guaranteed approval for any kind of loan product.

Lenders making such claims are scam

No registered and ethical lender can make false promises like this. It is impossible to guarantee approval without checking your financial condition and credit score. If any lender insists on offering you a loan despite your bad financial circumstances, they are lending against your interests. Such lenders are bogus.

They intend to make extortionately high profits by charging very high rates. Once you fall into the debt trap, you will not be able to get out of it. Unfortunately, it can be difficult to file a complaint against an unregistered lender because the onus of finding the registration details is on you. You will be held accountable because you did not check the credibility of a lender before applying for a loan.

Some lenders offer 100% acceptance loans

You must have come across some lenders who provide you with 100% acceptance loans. It is not a type of loan. By 100% acceptance, lenders mean that they accept applications from all types of borrowers. Even if you have got a poor credit rating, you are free to put in a loan application. However, it does not insinuate that your lender will certainly sign off on your application. A golden rule of thumb says that a lender will consider your repaying capacity and credit score thoroughly. If they find that you cannot repay your debt on time, they will turn you down. Bear in mind a 100% acceptance loan term is used to encourage as many borrowers as possible to apply for a loan and this includes bad credit borrowers. It increases the chances of lending money to many people, which is a win-win.

How to avoid being fallen into the trap

Loans with guaranteed approval do not exist at all, and if you find any lender providing these loans, you should not believe in them. They are frauds. They can trap you in an endless cycle of debt. Here are the ways to avoid being fallen into the trap of such lenders:

·         Check the registration details

The registration details must be given on the website of a lender, usually on the footer. If they are missing, you should immediately understand that the lender is not registered. You can also check the registration details on the Financial Conduct Authority’s website. Type the name or the URL of the lender, and you will get all the registration details.

You should always try to avoid borrowing money from such lenders because they aim to charge very high interest rates to make profits. You can be trapped in an ongoing cycle of debt. It will be all but impossible to settle your dues once you fall into debt. Therefore, it is suggested that you borrow money only from a registered lender. Check all the registration details carefully. Avoid borrowing money from an unregistered lender

·         Read reviews

Registration details are not enough to check the authenticity of a lender. You will have to look at other factors, such as interest rates and the deals they offer you. Interest rates vary by lender. Although it is said that lenders do not charge high interest rates when your credit score is good, the fact is that it is not true all the time. Some lenders charge high interest rates despite a good credit rating. Their deals are also not as affordable as they should be. You can get to know all these details by reading online reviews.

Make sure you read Google reviews or TrustPilot reviews. You will find a number of complaints against the lender to give you an idea about what kind of challenges you are likely to encounter while borrowing money from them. Of course, there will be some bad reviews, but as long as the overall rating is at least three stars, you should not hesitate to borrow money from that lender.

·         Consider alternatives

Payday loans do not run a credit check, and therefore, they are quite expensive. As the lending decision is made based on the financial details you provide, you should be genuine about your expenses. This will work to your advantage because your lender will not lend more than you can afford. You should try to contact a payday lender who runs soft checks. They are more affordable than payday loans without credit checks at all.

Further, you should consider bad credit loans. You will lose some credit points, but that will have temporary effects on your credit report. You will bounce back after making a few payments on time. Bad credit loans charge relatively lower interest rates.

The final word

No lender can provide you with 100 percent approval loans. They do not exist at all. If any lender promises to provide you with these loans, it should raise alarm bells. Such lenders can be loan sharks. They charge outrageously high interest rates that can throw you into a deep hole of debt.