Getting a loan can be hard, especially if your credit rating has taken some hits. But the simple fact of life is that sometimes you do not have enough cash on hand to cover all of your expenses and a loan is necessary. It could be that you have been laid off, made to take a lower paying job, or have experienced an unexpected emergency like major car or home repairs, or even been unfortunate enough to have astronomical medical bills. If you are thinking about getting a loan to help you through a rough financial time, be careful! While there are some good lenders out there who can lend a hand, there are also those lenders that prey on people and make loans that are near impossible to repay.
This type of lending is referred to as predatory lending, and it is contrary to law. The end result is a loan that has unfavorable terms, such as:
- More fees than are generally associated with similar loans.
- Rates that are higher than usual.
- Prepayment penalties, or penalties for late payments that are harsh.
- Financial incentives paid to third parties for helping to broker the loan, or referral fees being paid by the lender to another entity.
As always it is a good idea to read the fine print before signing any document, especially a loan document. There could be clauses in the loan papers that require you to settle any dispute about the loan by arbitration only, thus eliminating your right to go to Court and have a Judge or jury decide your case. There could also be add on items to your loan, such as insurance or other policies that you don’t really need. These add on’s can really add up, causing your payments to skyrocket without any added benefit to you. Taking on a predatory lender is a tough decision to make, but a successful case can result in reduced fees and financial awards to the borrower. It is also important to bring these issues out so the practice is put to an end and future borrowers do not also become victims. If you believe you have been the target of predatory lending, or that a loved one has fallen into this trap, call us for help. Many times the elderly are taken advantage in this way, and there are things you can do to put a stop to this lending practice!
For more information about debt management and your rights, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.