Predatory lending is an unfortunate reality. These lenders count on the ignorance and naïveté of consumers, constantly looking for ways to make your money their money. Don’t let it happen.
The first step toward protecting yourself and your family is to know a predatory lender when you see one. Here are a few signs that might help you avoid a messy situation.
Question Ambiguous “Extras”
We all know about “bundling”. It’s the way phone and insurance companies get us to buy several products at a time, promising significant savings and the convenience of one company’s services.
Sometimes it’s a great deal, but sometimes it’s a ploy. If your lender is offering you other products, such as insurance, be absolutely sure they’re a good fit and a good deal before signing on the dotted line. Many lenders will try to sneak these “extras” past you, but all it takes is a little extra scrutiny to stop them in their tracks.
Remember This Phrase: “Forced Arbitration”
Here’s the scene: You’ve entered into a loan agreement with your lender, but things are starting to get ugly. You suspect you may be the victim of abusive practices, so you start to consider legal recourse. Then, surprise! You see the phrase “forced arbitration” in your contract.
This means that you must engage with an arbitrator, and you have no choice over who that person may be. Think of it as home court advantage in the NBA finals. You’re not guaranteed to lose, but you’re not in the greatest position to win. Many arbitrators have worked with the lender in the past and hope to work with them in the future. You do the math.
When it comes to predatory lending, you have control over your destiny. Approach the process with caution and a decent amount of knowledge, and you’re much less likely to be a victim of unethical practices. Don’t let the mistakes of the last several years be in vain. Think you’re being targeted by a predatory lender? We can help you figure it out.