| SolveYourProblem.com
Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
Beware
Predatory Lending: Debt Consolidation
If
you are thinking of getting a debt consolidation loan make
sure you have plenty of time to shop around, otherwise
you may become victim to predatory lending and the techniques
of this practice. Predatory lenders in the debt consolidation
area are a common practice in taking advantage of those who
wait to the last minute to seek out a debt consolidation loan. When you don't leave yourself enough time to shop around you
may be more willing to take a loan with insanely high interest
rates. Interest rates that reach the maximum amount allowable
by some states even for mortgage interests. By leaving yourself
no time to compare, you are unaware that there are others that
will offer you a lower rate and fall for the higher rate. Not
only do the predatory lenders get away with it, but also you
lose a ton of money in this way if you are not careful.
Besides giving yourself enough time to shop around, you may
also want to carefully consider why you are in debt in the
first place. Let's face it, most of it has to do with that
pesky little word: credit. Those who are predatory lenders
and use predatory lending techniques, will pressure you no
matter what, even if consolidation is not right for you. Remember
to trust your instincts, don't let yourself be pressured, if
you feel you are just going to end up back in debt even after
you consolidate, then maybe it's not the best solution for
you at this time. Don't let predatory lenders take advantage
of you at your weakest and most vulnerable time. Another predatory
lending technique that lenders may use is adding a ton of extra
fees and taxes to the loan. This can include expensive insurance
that isn't necessarily needed, just to boost the profits that
the lender can make on the deal. You should also leave yourself
enough time to thoroughly go through each and every detail
of the agreement before signing your life away. This will once
again show the true colors of the lender, if they pressure
you to hurry up and sign no matter what you are probably better
off not signing at all.
Something else you should be careful of when considering a
debt consolidation loan is the type of loan you agree to. There
are two different kinds actually, one is a home equity loan
and one is a personal loan. In terms of the home equity loan,
you borrow against the value of your home, with your home as
collateral. A personal loan is basically based upon the borrowers
promise or word. If you are pressured to get a personal loan,
no matter how bad your credit, that is not a good sign. This
is because those with worse credit will be charged higher interest
rates, because they are more of a risk. Because of the higher
interest rate, the lender makes more money. If you have any
chance of getting a home equity type of loan and you have poor
credit, it is your best bet as compared to a personal loan.
One common mistake people make and can make them prey to predatory
lending techniques are wanting lower payments, rather than
lower costs. When you have lower payments this can extend the
length of the actual loan and can have you paying off the loan
for years to come. Therefore putting you into debt for longer
than you would like. A little extra in monthly payment can
help you pay it off far quicker and bring you financial freedom
far sooner as well.
Another
thing you want to be careful of, as in all types of loans,
is the kind of interest you are being offered. Meaning
are you being offered a fixed rate or just an introductory
rate? If it is only introductory then yes it starts off low,
but rises
sharply after the introductory period is over. A fixed
rate is the best way to go when it comes to interest rates
being
offered in a debt consolidation loan. A lot of lenders depend
on you not knowing the difference between these two types of
interest rates; don't let yourself be one of those who don’t
know. Remember to save yourself enough time to compare between
lenders and you will find it a lot easier in avoiding most
of these predatory lending techniques. A lot of these techniques
rely on those who are in a hurry or backed into a corner and
have no other way out to take advantage of people with them.
So don't let yourself be a victim of predatory loaning techniques
when looking for a debt consolidation loan. Be disciplined
and leave yourself enough to research, in order to get the
best deal you can. It can definitely save you money in the
end by avoiding being taken advantage of by predatory lenders.
# # # # #
SolveYourProblem.com
: 2007
> Home > Debt
Free Articles: Main Page
|
