Guaranteed loans are really made for people with past credit problems, like those who have just gone through bankruptcy, but for this very reason it’s generally a good idea to consider other options first.

See, because this option is targeted at people with bad financial histories, they know that you have few options and will accept any interest rate or fee that they throw at you when you need a loan. You may decide that these rates are worth it because you need cash now, and making the payments over time will actually help you rebuild your credit, and that may be true.

However, I suggest you carefully consider some other options first. You may need cash now and not have any kind of collateral to offer, in which case a guaranteed option may be your only choice, but in terms of your long term financial stability it’s better to avoid this. While repaying a loan will help build up your credit, a guaranteed option with it’s high interest rates, and often times hidden fees, will hurt your wallet and possibly get you into financial problems.

One great option if you have something of value like jewelry, vehicle, or real estate is to use this as collateral on a loan to get yourself a deal with a more traditional lender, and get yourself a better interest rate. This will save you money and help you avoid future problems.

If collateral isn’t an option for you, try and work on your credit in other ways for about a year after you’ve discharged your debts before applying for a small unsecured loan. You can do this by making payments on time on all your bills, and by getting a secured credit card at your bank.

Of course, this option doesn’t help you much if you need cash now. If you need money now, and you don’t have any form of collateral, you’ll probably want to look into guaranteed loans. Be sure to shop around, I generally recommend looking at five different lenders offers before signing on for anything. Look over the terms and conditions carefully–if you don’t understand something, ask–as this is the only way to find a deal without fees that you are unwilling, or unable, to pay.