Debt can quickly lead to a vicious cycle that eats up your finances and makes it almost impossible to get back on your feet. Many people fall prey to this debt cycle through predatory loans, which are abusive lending practices that keep people trapped in a cycle of minimum payments and refinancing. For victims of predatory lenders, the consequences could include unsustainable loan payments, the loss of one's home or vehicle, and even bankruptcy. The best way to protect yourself from predatory lenders is to be able to spot some of the most common signs of this abusive and destructive practice.
If a loan agreement's are fair and legal then there is no reason why you should feel pressured by the lender into signing the loan agreement. If the lender tries to rush you into signing the agreement or gets frustrated if you say you want to read the agreement over for yourself, then you should take that as a sign that there is something in the agreement that the lender doesn't want you to know about. You should get an attorney to read over your loan agreement before signing it.
Most reputable lenders will not offer you a loan before you actively solicit them for one. If you receive a loan offer in the mail or by phone then you should be careful about what is actually being offered. Furthermore, you should ensure that your lender is licensed and does not have a history of providing predatory loans.
Why no credit check?
While it can feel great that a lender is offering you a loan without conducting a credit check, you should nonetheless ask questions about why a lender would not want to be more careful about who they lend money to. Get a credit report on yourself before shopping around for a loan so that you have an idea of what you can qualify for. If a lender is offering you a loan that sounds too good to be true, then it probably is.
Other red flags
Finally, read the loan agreement carefully for other possible red flags. For example, you may notice blank spaces or additional services, such as insurance, included in the loan that you neither need nor can afford. Also, be careful of loans that may offer low interest rates upfront, but which then balloon after a period of time.
Contact an attorney
The attorneys at Weisberg Law have handled many cases involving predatory lending, including mortgage and auto fraud. If you are struggling to make payments on your mortgage or other loans and are facing the prospect of foreclosure or severe financial hardship, then contact our offices today to find out how we can help you.