Signs of Bad Personal Loans

For the most part, lending companies are honest business ventures seeking to make a profit from providing loans to customers in need of the product. Although some lenders charge higher fees than you wish to pay, they are still legitimate entities. Unfortunately, not every lender behaves in an ethical manner and borrowers may not recognize the signs of bad personal loans until after they close the deal.

Spam Marketing Techniques

Unless you have an amazing spam filter on your email accounts, you’ll receive credit offers in your inbox at some point. When you’re in need of extra money and you find a guaranteed approval offer when you log in, it seems almost meant to be. That’s what the lender wants you to think. Out of the thousands of people they sent that message to, they hope a decent percentage will accept their terms.

Some of these spammers are out for your personal information so they can steal your identity. Other spammers want you to apply for their loan that charges loan shark rates. Either way, it’s smart to avoid working with companies who are too eager to seek you out. Quality lenders gain business through proven marketing efforts; bad personal loans use shady methods.

Pushy Sales Approach

Lenders like to impart a sense of urgency on their potential customers to make the sale. If they let you walk out of the office, they risk you finding a different lender and losing the loan sale. When your lender presses you to submit the application right then, it’s not a warning sign of bad personal loans; it’s a standard technique to make the sale.

On the other hand, you know the difference between someone trying to make a sale and someone trying to intimidate you to get what they want, in this case, the loan application. No matter how rough your credit history may be, your lender should never talk down to you because of it. Making threats about how you won’t get a loan anywhere if you don’t accept this one is also unacceptable behavior. If you’re in this situation, walk away. Using these tactics to win your business can only mean things will quickly deteriorate after you close the loan.

Avoiding Bad Personal Loans

While there is no magic formula to avoid bad personal loans, you can contact the Better Business Bureau to find out if other customers report shady behavior from a lender. Doing a bit of simple research on the lender’s website is also a good idea. If you can’t find an address and phone number for online lenders, but you do find a site riddled with typos, broken links and missing web pages, continue your search for a reputable lender.

Source: http://www.superpages.com/supertips/bad-personal-loans.html