How Can I Tell a Good Loan From a Bad One?
Whether you’re looking for short term or long term loans, you have to realise that there are just as many bad loans and lenders out there (such as payday loans with extortionate interest rates) as there are good and reliable loans (like those provided by banks).
There are all kinds of things to look out for when you’re talking to a lender. The problem is, many people fail to heed the warning signs, and then find themselves stuck in a bad loan.
This article has been written to help you find out how to spot a good loan from a bad one.
Who do bad lenders look for?
You first need to determine if you fit into the group of people that bad lenders target. They tend to target people who have urgent money problems, minorities, non-native English speakers, people with bad credit, elderly people or people with low income.
If you fit into any of these groups, you need to exercise great caution when you approach lenders or if lenders approach you. It’s important to understand that it’s no bad thing to feel embarrassed about deciding not to go through with the loan.
After all, it’s your livelihood that’s at risk, so you need to think of yourself first.
Warning signs
There are certain phrases a bad lender will probably come out with that should set off alarm bells in your head. The first sign is that the lender tries to make out that he or she is doing you a special favour.
They are making money by lending it to you, so they’re not really doing you a favour at all. They’ll also say things like ‘you don’t need to worry about the finer details’ or advise you to ‘ignore the fine print’.
Additionally, they might also demand an answer within a day or two, whereas good loans definitely do not require such immediacy.
Other things to look out for
Be careful about other ‘costs’ suddenly popping up when you’re about to close the deal. These might be additional ‘fees’, suddenly and surprisingly incurred for no apparent reason. Also, you should look out for requests to provide false information on any forms at all.
You should be wary if the lender seems intent on making you borrow more money than you initially wanted to. This is purely to increase his or her commission. Make sure you stick to what you need and don’t be tempted to take more.
Category: Short Term Loan
