Bad credit loans have become the trend in lending industry. They are convenient to apply. The process is shorter and approval and release are quicker compared with regular loans. Definitely, no credit investigation is needed when you express your intention to get this kind o f loan. There are a few choices of loans when your credit score is in bad shape. You can get salary loans, online loans, cash loans, instalments loans, and title loans.
But because bad credit loans have become popular today, you should get a loan the first time you saw an advertisement online. Not all bad credit lenders are the same. Many of them have hidden charges and schemes that may only trap you deeper into debts. Others are scams whether the cash loans and salary loans are taken online or in the mortar-and-brick world. In order for you to avoid scam and fraud, you must be vigilant and your instincts sharp. Here are a few kinds of lenders you should avoid when you get bad credit loans.
No Black & White System
True, in bad credit loans, your credit score is not important. But this does not mean you should not know your score. There are lenders who lie about your credit score in order to impose upon your loan a higher interest rate. Generally, in bad credit loans, the interest rate is higher because you pose a risk as a borrower. But how high can the interest rate go is discretionary on the part of the lender. Do not believe everything the lenders tell you especially when it comes to your credit score. It would be better if your lender, if for example, you are applying for title loans or instalments loans, present to you everything in black and white with a printed credit score in hand. It would be best if you could also bring your own copy of your credit score when you talk to an agent.
Requiring Financing Options & Other Extras
Title loans, cash loans, and instalment loans may allow you to get a higher amount of bad credit loan. Many lenders would want that you cannot pay your loan so they could foreclose the mortgage (car loans and home loans) you executed to secure your title loans. One way of doing this is to require you to add items to your loans such as insurance and warranties. These items demand payment of fees and premiums. But if you are already paying 18 per cent APR on your principal loan, where is the logic in paying for more with unnecessary items? But this does not mean, however, that you should opt out on these items. The thing is, you can buy these items without the assistance from your lender. In fact, you can get discounts without the markups that go instantly to your lender.
One sign that you are dealing a bogus lender is when you are required to make advance payment as security to a loan you are yet to receive. In the United States for example, there are laws against mail fraud, but this do not stop scammers from milking you. These lenders found another way to get money from you—wire transfer— which is more dangerous as you can lose its track the moment the money is wired. But come to think of it, if you are in need of money, why bother yourself to look for money as a security you will give to a lender? There is simply no logic on this regardless of the justification you may get. Requiring advance payment is very common when you take salary loans, cash loans, and instalment loans.