4 Warning Signs that You’re Dealing with Bad Credit Loans
4 Warning Signs that You’re Dealing with Bad Credit Loans
Bad credit loans are loans designed to meet the needs of credit applicants with minimal, or negative credit history. Establishing positive credit history is an important part of living a full and meaningful life, free of unnecessary stress and hardship. Negative remarks on your credit report can, and in many cases, will get in the way of your access to the funding you need to cover life’s unexpected bumps in the road.
If your credit report has a few dings, don’t let a sense of defeat or desperation after a series of credit denials force you into dealing with a company that provides fraudulent or predatory bad credit loans.
How much information are they asking for?
Some untrustworthy sites use a tactic called phishing. This tactic involves collecting information, voluntarily, from Australians that are simply looking for help during a difficult time. These sites prey on the desperation of loan applicants, which fraudulently using the information collected to open additional accounts, or sell the applicant’s personal information to an identity thief online.
Here is the information that is normally requested as part of a credit application:
- Your first, middle and last name.
- Your current address, and the addresses where you’ve resided in the past five years.
- A reference that can vouch for your credit worthiness. This is the individual that the lender will call if you’re unable to make the agreed upon payments.
- Bank statements and proof of income to verify the claims made on your application. These should have been addressed to your current residence, allowing the lender to verify your current place of residence.
- The number from a personal identification card to verify your identity.
- For automobile loans, or loans secured by a vehicle, a car’s tax invoice may be required.
Now, ask yourself, if a lender is asking for this information online, do you know where it’s going? Do you trust the lender? Do you trust the people handling this information? Many Australians in need of a lender’s service that provides bad credit loans prefer to deal with a local provider that can meet with them in person to discuss their needs, and asses their ability to repay the loan.
Is the lender listed on SCAMWATCH for providing bad credit loans?
The Australian Competition and Consumer Commission (ACCC) maintains a site called SCAMWATCH. This site is dedicated to tracking known scams, and alerting the population of the potential risks associated with dealing with these bad actors.
The site also has a collection of articles for Australians to read so that they can better understand the credit application process, as well as the potential pitfalls.
Are there a ton of miscellaneous fees and surcharges in the fine-print?
It’s not unusual for a lender to charge a few fees to cover the processing of your application, the origination of your loan, and other collection costs if your loan isn’t repaid at the agreed-upon schedule. But, some less reputable lenders that offer bad credit loans like to take advantage of desperate applicants by tacking on additional fees to the loan terms, or making the charges and fees difficult to understand prior to the applicant signing the loan agreement.
Ask your lender for a clear explanation of the fees and interest rate charged for your loan. You’re legally responsible for paying these costs once the loan agreement is executed upon. Standard loan fees include:
- An application fee that is tacked onto the principal after a loan is agreed upon and funded. You should never pay an application fee when applying for a loan.
- An early repayment fees is charged by some lenders if the borrower pays the loan off prior to the agreed upon terms. This fee is designed to compensate the lender for part, or potentially more than the last interest that the loan would have generated during the time between the early payoff, and the agreed upon payoff date for the loan. Carefully consider this fee before paying a loan off early.
- In certain, high-risk situations, a lender may charge an ongoing monthly fee in addition to the interest rate for the loan. While uncommon, it’s important to clarify these charges so that you understand the entire cost of the loan.
- Recovery fees are agreed-upon by the lender and borrower prior to executing the loan. These fees and/or penalties will be assessed to the borrow if they fail to payback their loan in full, on time.
The lender’s telephone number doesn’t put you in touch with a live-person during normal business hours.
Bad credit loans can be complicated, and repayment can be difficult, depending upon your situation. If you run into trouble down the line, how will you get in touch with your lender to negotiate a payment arrangement? If you notice unexpected fees popping up on your balance statement, who will you call to fix the situation?
Test calling the phone number for the lender, prior to executing a loan, is an important step in verifying the legitimacy of the lender. The individual that picks up the phone should be able to answer your questions in a competent, transparent manner. If you feel like you can’t trust the individual you’re speaking with over the phone, then you probably can’t trust the lender.
Don’t go down the path of accepting a loan if you aren’t 100% confident in the ethical and moral fortitude of the bad credit loans being offered.
Bad Credit Loans Don’t Have to be Predatory, or Mean Spirited
Just because you’ve had difficulties in your past does not degrade your value as a human being. Don’t let yourself be pushed around by loan sharks, and their sinister counterparts online. Instead, work with a reputable provider of bad credit loans in your local community.
Australians that reside in or around the Brisbane and Gold Coast areas should turn to HockYourRide.com.au for all your lending needs. We offer fast cash loans for virtually any credit situation, based on the collateral you have available. Providing fast cash loans in as little as 30 minutes, for up to $100,000 is our specialty! And we treat every client like family.
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