How to Know if a Loan is Good or Not

By | May 20, 2013

When you need money, you only know one thing for sure; you need it! This means that you are likely ready to take out any opportunity to borrow money, particularly if your credit history is not good at all and you can only see small loans as the only solution to go with in your time of need. However, you should be aware of certain alert signs to know if you can trust a loan lending company or not.

Payday Loan Lenders

As noted above, when your credit history is poor, bad, or you do not have a credit history at all, payday loans are the easiest was to borrow money without having to undergo a credit check that might be determining to get your application declined. However, payday loans are not only the loans with the higher interest rates, but those more commonly associated to fraudulent lenders that provide you with misleading information or hide interest and finance fee charges when you deal with them. Keep your eyes wide open when you negotiate with these lenders to make sure that everything is fine.

Ghostly Loan Lending Companies

Actually, the Internet facilitates much of your job when shopping around for a loan whether a personal loan, a business loan, car loan, or payday loans. No matter what type of loan you need, what you need to do really is brief research on the background of the company you are taking out a loan with because many of them could be fraudulent, or simply ran by middlepersons in the quest to earn a commission either from your pocket or from a lending company’s budget.

Signs to Keep in Mind

Although, you can find a loan lending company that seems to be legit, there are facts that are often show signs of distrust when it comes to applying for a loan with them. Perhaps the most common of those signs is the lack of an “About” page or a generic one that provides not much information on when the company was established or where it is actually headquartered. The lack of a phone number or the use of a P.O. Box rather than a physical address and number can be worrisome facts to trust a loan.

Too Many Facilities Are Often Suspicious

When a lending company or lending agent offers you too many benefits, something smells fishy to trust such deal. Payday loans, as an example, are short-term loans that provide you a small amount of money that usually ranges between $100 and $1,500. However, if someone offers you more than this money or more than the money allowed in your state for these types of loans, how can you trust that deal?

Beware of Phone Calls

An obvious untrustworthy loan deal is the one that comes to you over the phone, particularly if you have not been in touch with a lending company to request a quote or further information. Telemarketers still use this trick to get you applying for a loan when you might not need it but who refuses the opportunity to borrow money?  You should for your own good sake.

 

Yakezie Carnival at Growing Money Smart
Finance Carn. for Young Adults at The Happy Homeowner