It’s no secret that Americans carry a lot of debt. In fact, the average American has roughly $38,000 in personal debts. That’s not counting mortgages.
Everyone should pay their debts. Not only is the right thing to do, but also it will help keep your credit score where you want it to be.
But sometimes life gets in the way and you get behind on a bad credit loan. While the lender has the right to contact you to find out what is going on, some personal loan companies take it way too far.
The Consumer Financial Protection Bureau, the government agency that oversees lending practices, does not give lenders the right to harass you about your debts. However, some lenders will use shady and downright abusive tactics to get their money back.
Here’s how to find reasonable lenders who won’t leave death threats on your voicemail because you’re a month behind on your payments.
If you get a personal loan offer in the mail or your email inbox that seems too good to be true, that’s probably because it is. Predatory lenders offering guaranteed approval personal loans for bad credit are aggressive about roping in new borrowers.
They make promises about low interest rates and favorable repayment terms. But if you don’t pay close attention to the fine print, you may find yourself caught in a loan with an interest rate or excessive fees that is choking the life out of you.
The Internet is a fantastic place to find borrowing options from reputable lenders. However, just as 40-year-old child molesters can pose as children on the Internet, unscrupulous lenders can portray themselves as honest on the Internet.
Do your due diligence before taking out an online loan. Has the company been in business for a while? Can you find reviews? Are they mostly positive? Has anyone you know ever taken out a loan with them?
Get an idea of average interest rates and terms for your situation. Run away from anyone that offers you something very different.
Read the Fine Print
Once you’ve chosen an online loan lender and applied, be sure to carefully read the fine print before accepting the terms of the loan. Know what’s expected of you to stay in good standing on your loan.
Find out when the lender will consider you to be defaulting on the loan. Some lenders have a rather strict 30-day grace period, where others give you 60 or even 90 days before reporting the default.
Make note of any fees and be sure that they are figured into the APR. Do they charge prepayment fees? Most installment loan lenders don’t and early payment can be a good way to save on interest if you’re able to get ahead of your loan.
Not All Personal Loan Companies Are Predatory
The vast majority of personal loan companies are reputable and honest in their lending practices. However, there are a few out there who will chase you down and treat you inappropriately if you get behind on your loan. Follow these tips to find a good lender who won’t pester you incessantly.
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