Loan Fraud & Ten Ways to Protect Yourself
Hundreds of people daily are encouraged into embarking on loans from questionable lenders and individuals. Display just a little naivety, and no matter who you are, these entities will take advantage. To lessen the dangers of this happening to you, here are some points that you should consider. These disreputable lenders can be very tenacious while purporting to serve your best interests. Take the time to educate yourself and save yourself some potential financial heartache. If you are using Firefox you can even save it to your Bookmarks and read it again later.
1. To obtain a loan you should never be tempted to make false claims about your available cash, income, down payments or expenses. Any kind of lender who encourages this sort of behaviour should be avoided as they are totally unscrupulous and have no qualms about your real ability to service your loan.
2. Prior to signing the paperwork you should check that the loan terms and costs have not been altered from those that you agreed to initially. If you are unsure, have a professional go over it for you. This can be arranged for very little cost.
3. Stay away from blank documents. Loan documents and sales contracts that are blank should NEVER be signed. If the papers contain information that you know or suspect to be untrue then do not sign these either. Do not allow yourself to be persuaded by anyone to do otherwise.
4. Give yourself time for research if you do not already have a financial broker. You will be able to familiarize yourself with the costs of the loans and have a better grasp of the types of loans on offer. When you are ready to talk to a lender, you will appear more knowledgeable and less open to being taken advantage of.
5. Be wary about telling lenders why you need the funds. Unemployment, medical emergencies and debt problems will make you appear more vulnerable to the less honorable lenders.
6. Higher risk loans like interest only payments, balloon loans, and steep prepayment penalties should be viewed with caution. Although these sorts of loans can be used to your advantage if you know what you are doing strategically, they can easily turn into financial nightmares when they go wrong.
7. Avoid doing further business with any organization or individual who suggests, or carries out false appraisals.
8. You should not keep refinancing your equity in your home for holidays and the like. It is extremely tempting to do this when funds are looking at you from your bank account. You need to remind yourself that it is not your money and you are only increasing the size of your mortgage. Some day you will have to pay it back!
9. Like anything else, always obtain three quotes as a minimum. Pay special attention to the interest rate, and whether it is accruing daily, weekly or monthly. The same should be done with your repayments and fees.
10. Can you afford the loan repayments? Budget for the unexpected expenses such as illness and other financial disasters. Don’t forget to factor in day to day living expenses. Falling behind in your loan repayments can have catastrophic repercussions. It is always best to be conservative with your borrowings.
Sometimes it’s difficult to know where to go first or you might feel a little better if you had a quality lender to consider so that you could weigh others up against them, well I have supplied such a supplier for you to start with - you can get there by clicking here.
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Tag: loans
August 21st, 2007 at 10:27 pm
[…] You can increase your credit rating. However, make sure that you always protect yourself from loan fraud. This will take some time and work but you can do it yourself. You need to advise the reporting company of any information which you perceive to be in error. Your written complaint needs to contain copies of all paperwork to support your complaint, and should list the facts and errors. You should use certified mail “return receipt requested” to enable you to know when the reporting company received the paperwork. Obviously, you should always keep copies of everything that you send off. […]