Taking out a loan is a serious business. Depending on the kind of loan you choose, you may jeopardize loosing your house, car, credit or ability to get loans for purchases years down the road. You may think getting a loan is a great idea when you want to buy a car, motorcycle or house in the UK but it is best to weigh this option heavily. The impact a loan can have on your financial future can be just as devastating as it can be wonderful. People who have credit problems or are looking to get done quickly will accept anything to get the ball rolling. You can often get a better deal if you look around a little longer or read the fine print of ‘shop and go’ loan offers. Anytime you research loan options online, you will come up with hundreds of sites that promise low cost, cheap, or low interest loans. There is often little explanation about the fine details of the loan, payback methods or what happens if you run into trouble and cannot repay the loan. To put it simply, you can lose your stuff.
Some loans have terms, conditions and clauses that must be fulfilled or the loan repayment is invalid. Many such conditions would send you running away, screaming, from the lender if you were aware of them. Most people become aware all too late and have to pay extra fees they were not aware even existed. There are warning signs that come with bad loan deals. You need to know what to look out for to ensure that your loan is solid and no fine print has gone unread. Following are the loan issues to consider before signing any contracts:
When a lender tries to get you to borrow more than you actually need, you should know that it is not for your benefit. Lenders get a commission that is typically percentage based so the more you borrow, the more they make.
If your lender suggests that it’s okay to lie on the application, they are putting you at risk for going to jail for fraud. You can also be forced to repay the loan immediately when the truth is known whether or not you are able to do so. At the very least, you might get a loan that you cannot pay back and lose your possessions anyway.
Any lender that does not or will not provide you with all the paperwork, disclosures and itemized lists of costs has something to hide. Run. Away. Fast.
If the lender suggests that you do not need to read all of the information before you sign, DO NOT SIGN. It is easy to dupe someone who does not take the time to understand where their money is going or how much they have to repay. Always read the whole contract. Do not sign a blank form; that is just asking for trouble. Always, always get copies of everything from start to finish.
If they ask for money up front, walk away.
If they try to get you to pay more than you think you can, end the deal immediately and find a lender that is not trying to take you for a ride.