Lehi, UT (PRWEB) September 30, 2005
Lending scams have been around for decades, but over the last couple of years have increased significantly. It seems no finance industry is safe from the avalanche of loan fraud and predatory lending practices.
Even with a loan that seems reasonable, there can be subtle flaws in the fine print that can be enough to cause a borrower to lose their home or owe much more than they think they did at closing. It's important to be aware of the tactics with loan scams in order to avoid being a victim.
Most of the lenders to beware of are those who target people with bad credit or no credit saying they will approve anyone, guaranteed. An honest lender will not guarantee anyone a loan before the application process has begun. Research Sub Prime Lenders before you use them.
Payday loans or cash advance loans have excessively high fees. However, some payday loan companies will charge extraordinarily high fees. They can charge interest rates as high as 900% APR and higher. Borrowers can get trapped in these loans when they borrow more than they can afford to repay quickly. When the amount due increases so fast, borrowers may never be able to pay off the loan, but end up too deep in debt to get out.
There are home mortgage lenders who will target low income borrowers. These lenders have the intention of offering the borrower a home equity loan with a payment they cannot afford. The lender knows they cannot afford the payment, but will push the loan through anyway using unscrupulous means. Then, when the borrower cannot make the payments, the lender forecloses and robs the borrower of their hard earned equity.
Victims of lending fraud have also been hurt by a practice going on of solicitors approaching borrowers with a "bad credit loan program" that is guaranteed if the borrower pays a fee of $100-$2,000 or more. Usually the "lender" takes the fee and runs. The borrower is left with no loan and their fee money is lost. It is against the law to charge a fee to obtain a loan like this.
There are more lending scam tactics going on in the lending industry, online and offline, than can be listed. Most of them involve misrepresentation of what the borrower can really afford to pay back, interest rates and fees much higher than what is reasonable or demanding upfront fees for a loan that is never realized.
Its important for borrowers to take the time to educate themselves on acceptable lending practices in order to spot the shady lenders and avoid being the next loan victim.
Recommended payday loan companies: http://www.abcloanguide.com/paydayloans.shtml.
Recommended good credit and bad credit mortgage lenders: http://www.abcloanguide.com/mortgageloans.shtml.
To read the warning signs of a bad loan, visit this page: http://www.abcloanguide.com/loanwarningsigns.shtml.
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