Avoid predatory lenders and stay away from financial troubles

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By: Good Nelly
on 5th Jun,2012

Money rules life. It rules your personal and professional life.
Avoid predatory lenders and stay away from financial troubles

Money rules life. It rules your personal and professional life. However, in the present economic condition, it has become quite difficult to earn dollars and preserve them. The consumer savings accounts are fast depleting due to various economic factors. As such, many people are trying to borrow money from wherever they can.

Predatory lenders know that millions of people are trying to borrow money. They know that people need loans. They wait for these people patiently and lay down the trap in a clever disguise. They manipulate the consumers using deceitful advertisements. They coax them to sign the loan papers by using sugar sweet words.

If you desperately need to take out a loan due to some financial requirements, then it is important to stay away from the predatory lenders. Read along to know about the tips to avoid predatory lenders.

Run away from predatory lenders to avoid a financial debacle

It does not need a lot of research to detect the predatory lenders. You can locate them by remaining alert and keeping yourself updated about the latest happenings in the financial world. Check out the following tips to spot the predatory lenders and avoid financial debacles.

1. Beware of lenders who show excessive interest: Lenders should be wary of giving money to you. They are not doing a social service by lending money. They are giving you money now. They want to get back their money with interests and fees. This is their source of their livelihood. If any lender shows tremendous interest upon you, then beware. Avoid taking out a loan from a person who is willing to give you a loan beyond your affordability. Never believe a lender under the following circumstances:

He is willing to give you money at any cost
He is willing to overlook your credit score
He induces you to enter wrong information in your loan application
He asks you to sign a paper where nothing is written
He says that it is not important to read the contract
He writes in the contract that you can't take legal steps against him
He charges very high interests, fees and penalties

2. Look beyond the disguise: Predatory lenders come in various forms. They can be an auto loan lender, predatory lender or mortgage lender. So, don't think that predatory lenders hide behind the smart advertisements and attractive websites. They can very well sit behind the desks of a bank or financial institution. There are hosts of banks which offer cash advance loans at high interest rates. The interest rates on these loans are so high that most borrowers are not able to continue with the loan payments after a few months. Their savings accounts become empty but they are still not able to get rid of the loans. So, avoid short term loans that come with very high interest rates.

3. Feel free to clarify your doubts: Ask all sorts of questions to the lender before making a sign on the dotted line. Clarify all your doubts before taking out the loan. Ask about the interest rates, penalties, fees, loan term, refinance limitations, etc. Ask if the interest rate will go up if you miss payments.

After asking various types of questions to your lender, it is high time you ask yourself certain questions. For example ask yourself if you can afford the loan. Is your income enough to make the loan payments? Find out the answers of these questions before taking out a loan.

If you have become the latest prey of the predatory lenders, then there are some steps which you can take. For instance, you can explain what has happened with you to the consumer protection bureau. You can also report your case to your state attorney general.

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