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At A Glance
- For consumer lending, an application still needs to be properly assessed before it can be approved.
- A broker can judge whether an application looks realistic, but can’t guarantee what a lender will decide.
- A “guarantee” may refer to something other than actual loan approval.
- Affordability, credit history, lender policy and documentation can still affect the outcome.
- Good preparation is more useful than chasing a promise of certainty.
Nobody Can Promise the Answer
Guaranteed approval sounds easy, right? All you have to do is apply and you’re guaranteed a yes.
Well, the truth is that someone is pulling your leg.
As is usually the case with things that sound too good to be true, guaranteed approval isn’t a real thing.
Nobody can know for certain whether a lender will approve your loan before they’ve actually assessed the application.
As a broker, I can look at your situation, work out which lenders may be a good fit, identify potential problems and help put together the strongest application we reasonably can.
What I can’t do is guarantee the lender’s decision. That’s why I don’t make that kind of promise. At best, it’s inaccurate. At worst, it’s being used to make an offer sound far more certain than it really is.
My advice? Don’t fall for it.
There’s a big difference between saying an application looks promising and saying approval is guaranteed.
Let’s break down why guaranteed approval isn’t a real thing, and why you should be careful when someone says it is.
Table of Contents
An Application Still Has to Be Assessed
You can have a strong application. You can choose a lender that looks like a very good fit. But the decision still has to be made after the application has been assessed, not before.
For consumer lending, a lender still has to look at your actual circumstances before deciding whether it can offer you the loan.
That means looking at whether the repayments are realistic based on things like your income, expenses and existing commitments, along with the information and documents supporting the application.
Then there’s the lender’s own credit policy.
A lender may also look at your credit history, how the loan is structured, what you’re buying, and whether the application fits within the lender’s credit policy and risk settings.
Until those checks have been done, nobody can properly know the answer.
There’s a Difference Between Likely and Guaranteed
A good broker should be able to look at your situation and form a pretty solid view of how realistic an application is.
We can compare lenders, look at their policies, spot potential issues and make sure the application is being presented properly before anything is submitted.
Sometimes that means we can be quite confident about how an application is likely to be received.
But confidence isn’t the same as a guarantee.
For me, the aim is to give you a realistic view of your chances, explain where the risks are and put forward the strongest application we reasonably can.
What Exactly Is Being “Guaranteed”?
Sometimes the word “guaranteed” is doing a lot more work than it first appears.
The guarantee might not actually relate to loan approval at all. It could refer to having your application reviewed, getting a response, being connected with a lender, or simply being able to apply.
That’s why it’s worth looking closely at the wording rather than taking the headline at face value.
If someone is advertising “guaranteed approval”, check what they’re really promising and whether there are conditions attached.
The important question is simple: are they guaranteeing the loan, or just guaranteeing that you’ll get through to the next step?
A Guarantee Doesn’t Fix a Weak Application
Words are powerful, but when it comes to loan applications, they can only do so much. Just using the word “guaranteed” doesn’t make the underlying application any stronger.
Increasing the chances of an application being approved comes from proper preparation and understanding the situation first.
If the repayments don’t fit the budget, there’s something on the credit report causing concern, the lender’s policy doesn’t suit the situation or the application simply needs more time, those issues still have to be dealt with.
That’s why we ask so many questions before an application goes anywhere. We’re trying to work out what could affect the outcome before a lender does.
And if something does go wrong, understanding why the application was declined is far more useful than looking for someone willing to promise a yes.
What To Take Away
A strong application can give you a good chance of approval. It still isn’t a guarantee, and don’t let anyone tell you otherwise.
Instead, we like to focus on what we can do. While we can’t guarantee the outcome, we can help you put your best foot forward.
If someone is promising more than that, it’s worth asking exactly what they’re guaranteeing.
If you’d like to work through your situation before applying, get in touch and we can look at what’s realistic and where the best options may be.
Tom is the founder of BrightCredit and a finance broker focused on borrowing situations that are not straightforward. His writing helps Australians understand credit, loans, and the details that can affect their borrowing options in a clearer, more practical way.