The most prevalent scams in the United States are those related to bad credit loans.
Borrowers who need poor credit loan financing but cannot qualify for standard loans due to their bad credit history are easy prey to predatory lenders.
Unscrupulous lenders may use deceiving tactics to victimize borrowers.
For example, you might be promised with a quick approval even if you have bad credit history or no credit history in exchange for an upfront fee. In some cases, lenders may offer attractively low interest rates which are bound to change as soon as the borrower signs up the poor credit loan contract. Apparently the real interest rate and the fees are not revealed to mislead people.
Do you need to acquire a loan too?
If yes, have you checked your personal credit? If you have a low credit score or bad credit, it is possible to find a legitimate lending company that will provide you with the loan you need. However, you need to be smarter and more cautious to avoid being scammed or ripped off.
Borrowers need to be aware about the tactics scammers and predatory lenders use to lure their victims.
How can you detect bad credit loan scams and avoid them? Check out the following tips:
Upfront payment is required.
The upfront fee may be referred to as an insurance fee, security fee, processing fee, and other names. However, under the Federal Law, lenders are prohibited from demanding an upfront payment from their customers in exchange for quick approval.
No credit check required.
Although there are lenders who are willing to extend loans for customers with bad credit history, no legitimate lender will automatically approve a loan application without inquiring the applicant’s credit history. Your credit history will still be evaluated. In fact, the rate of interest you will be offered will still depend on your credit score.
Your personal information is required for a free quote.
When gathering bad credit loan quotes, whether online or over the telephone, see to it that you are not being asked to provide confidential information such as your Social Security Number, license number, bank account details, etc. Identity thieves may use your personal information to commit fraud against you.
The company is not listed with BBB.
Take the extra time to check the lending company’s track record of service from the BBB (Better Business Bureau). All legal businesses in the US should be included in the BBB’s listing. Furthermore, you should be able to check whether there have been previous complaints or cases filed against a particular lending company.Plan your repayment. How do you plan to keep up with your monthly loan payments? Have you created back-up strategies to make sure that you will not miss or delay with a single payment? Create your personal repayment plan before submitting your application. If you must get a bad credit loan, you might as well use it to rebuild your imperfect credit.