Are there guaranteed payday loans?

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While there is no one loan that is 100% guaranteed for everybody, consumers are extremely likely to be approved for a payay loan, regarless of their current financial status. These are one of the most common short term loans out there. 

Payday loans are technically unsecured loans since you don’t have to offer any collateral in order to receive one. With instant payday loans online, borrowers are typically expected to repay their entire balance by the time they receive their next paycheck. Borrowers who fail to repay their payday loan within about two weeks are then hit with extremely high interest rates, and possibly other fees. According to the FTC, consumers may receive interest rates that reach up to 3905 on payday loans!1 While payday loans are almost always extremely easy to be approved for, they often leave the borrower in more debt than they started with. Therefore, a guaranteed payday loan usually isn’t the best financial option for consumers looking to improve their overall financial situation. 

So what are guaranteed loans? Great question! A guaranteed loan is defined as a loan that a third party pays off if the initial borrower fails to repay the loan. This is seen most often with mortgages. There are some guaranteed mortgages that the government offers to repay to the lender if the borrower defaults.

Based on this definition, payday loans wouldn’t be considered guaranteed loans since no one is paying it for you if you default. The reason some might consider an instant payday loan to be a guaranteed loan is that you give the lender a post-dated check for the total amount due at the end of the loan term. So if you default on the loan, the lender will still cash this check and get their money back. So from the perspective of the lender, repayment is usually guaranteed once they have that check and you’ve signed a contract.

Nobody likes being broke all the time, but it’s vital practice caution when applying for any kind of loan. The most important thing to remember, whether you’re applying for a payday loan, guaranteed mortgage, or secured loan, is that repaying on time is crucial. Borrowers who fail to repay their loans on time face consequences like lower credit scores and higher interest rates in the future.

CreditNinja works hard to make sure consumers have access to the resources they need to educate themselves about getting loans, handling their own finances, and more. Be sure to check out the CreditNinja dojo for free financial articles, debt calculators, and other helpful tools. 


  1. Payday Lending | Federal Trade Commission

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