Predatory Lending Scams
No credit, bad credit, no problem? Ahh...yes there is and if any lender tells you otherwise, don't deal with them. Predatory lending practices are illegal. But people in financial straits too often are unable to tell a good loan from a bad one.
Janise Bonds was looking for $26,000 to pay off her credit card debt and make some improvements on her home. She answered a flyer in the mail and wound up with a 17% interest rate and payments she can't afford.
The American Bankers Association says these loans are often the beginning of the borrowerďż˝s problems; they've come up with tips to help homeowners avoid becoming victims.
Watch out for telemarketers, door to door salespeople, and mailings or flyers that offer bargain loans and say your bad credit or lack of credit is no problem...legitimate lenders don't operate this way.
Shop around, compare interest rates, and total costs remember high up front fees may make a loan with low monthly payments cost more.
By the time Janise is done paying off her $26,000 it will cost her $90,000. For many people, instead of providing needed relief, these loans often result in much worse financial trouble.