In the personal finance world, there are good companies to deal with, and others you should avoid.
But how do you know which ones are legitimate, and which ones are taking you for a ride? If you are seeking a loan, it’s important to find the best, safest, and cheapest option you can.
If you don’t, you could end up with increasing debts and problems from day one. Here is a short guide on how to choose a loan company without getting burnt.
Direct selling is when a lender contacts you directly, either by phone, text or email. However, you should avoid companies that use this method, as they know very little about your personal situation.
Plus, the terms they offer in the message will not be what you receive. It’s just a tactic to try and tempt you into calling them back, where they will apply pressure, so you join up with their service.
In general, legitimate lenders will advertise in the national or local press, or, at most, send you direct mail in the post.
The awesome offer
If something sounds too good to be true, it tends to be just that. If you get a text that says you are guaranteed a payday loan, you won’t be.
If you get an offer of a good interest rate, you can bet your bottom dollar it won’t be the interest you end up paying.
This is something to look out for if you have bad credit. It might seem like the answer to your dreams, but you have to be ralistic. People with bad credit never get a good deal; it’s as simple as that.
Finding a legitimate company
If you are searching for a loan online, it’s always important to research the business you are considering. You can do a search at the Better Business Bureau, or use review sites.
It’s also important to use as many sources as possible to get a better overall picture. Another good option is to ask around for recommendations of your friends and family.
No two people will get the same deal, but you will get a good idea of the service standards and legitimacy of the company they dealt with.
The upfront payment
Warning bells should start to ring if the loan company you use asks for an upfront fee. It’s a common way for fraudulent lenders to prise money out of your hands, and often you will find that you never hear from them again.
However, if you are approaching a credit broker, things are different. Credit brokers are allowed to charge you a fee, and it is typical practice. So, find out if the company is offering credit brokerage first – and make yourself aware of the terms and conditions in the small print.
A lot of people seek out loans – but not everyone gets a good deal. It’s so important to read the small print before taking out any loan, or handing over any money.
Unfortunately, there are plenty of people out there that fail to do so and end up getting their fingers burnt.