Six Tips to Help You Recognize a Bad Credit Loan Scam

The suffering and desperation caused by the ongoing credit crisis and job losses, have spawned a whole new growth industry.

Bad Credit Loan Scams

It’s a particularly horrible phenomenon, because the people that operate these scams are preying on those that most need help, and they don’t care if they put the last nail, in a family’s financial coffin.

People that are drowning under suffocating debt, and have poor credit are being bombarded with ads like these, and many similar ones.

Looking For A Loan Or Credit Card But Don’t Think You’ll Qualify?

Turned Down By A Bank Because Of Your Poor Credit History?

Get An Instant Loan. Guaranteed. No Credit Check And Low Interest!

A person that’s desperate for a loan is easily tempted by advertisements and websites like these, because they offer a simple and quick respite from misery.

It’s said however, that forewarned is forearmed;

So let’s Look At The Tip-Offs To Rip-Offs.

Just one of the following should cause you to raise your antennae, and more than one of them should send you looking for another lender.

1) If you’re offered a loan on the the phone.

Companies that do business by phone in the U.S. are forbidden by law to promise you a loan, and to ask you to pay for it before they deliver.

2) The Federal Trade Commission (FTC), which is a federal agency that investigates and eliminates unfair and deceptive trade practices says;

“If you’re asked to pay a fee for the promise of a loan or credit card, then you can almost count on the fact that you’re dealing with a scam artist”.

3) A lender who isn’t interested in your credit history.

A lender who says that he doesn’t care about your credit record should certainly give you cause for concern. Why doesn’t he care?

Any advertisement that says things such as, “Bad credit? No problem” or “We don’t care about your past. You deserve a loan” or “Get money fast” or even “No hassle – Guaranteed”, frequently suggests a scam.

4) A lender who uses a copy-cat names, and similar websites.

Crooks will often give their companies names that sound similar to well-known and well respected organizations, and they also create websites that look like the originals.

Call directory assistance, or locate the lender’s number in the phone book, and then call the number to verify that they are really who they claim to be.

Be sure to get a physical address. A lender that only provides a P.O. Box is one that you should immediately check out with the relevant authorities.

5) A lender who is not registered in your state.

Lenders and loan brokers are required by law to register in the states where they do business. In order to verify their registration, call your state Attorney General’s office, or your state’s Department of Banking or Financial Regulation.

6) A lender who asks you to wire money or to pay an individual.

Never make a payment directly to an individual for a credit card or loan, because no legitimate lender would ever request such a thing.

Hopefully the above information will help prevent you from getting ripped off, but please help others too.

If you encounter a company that’s doing any of the above, then please tip off the relevant authorities.

Where To Complain

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

Finally – A Little Bit Of Advice That’s Not A Tip

If you have debt problems, then the very first thing that you should do is to contact your creditors, and attempt to resolve the problems, and the sooner the better.

If you’re unable to resolve the difficulties yourself, or you need some help doing it, then contact a credit counseling service.

There are nonprofit organizations in every state that counsel and educate people and families about debt problems, budgeting, and using credit wisely.

The cost of their services is either free or minimal, and we’re talking about $25.00 – and credit unions, universities, military bases, and housing authorities frequently offer low cost advice as well.

To learn more about dealing with debt, including how to select a credit counseling service, visit http://www.ftc.gov/credit.

Don’t Turn To The Wrong Lender If You Are Looking Into Bad Credit Loans

With the continuing financial crisis many people are looking for help with their financial situation. For those whose credit rating isn’t as good as they would like they could of course consider taking out one of the many bad credit loans now available. Of course you need to be wary as unfortunately there are others who are willing to prey on those who really need help with their finances and are in fact running a loan scam.

But of course how can one tell if the bad credit loans available are genuine or a scam? Below are some things to look for when looking for such loans that could provide you with an indication that these aren’t genuine.

1. As it is forbidden by law to grant a loan over the phone should you be offered such financial assistance over the phone by a lender this should immediately tell you that in all likelihood that this isn’t a real offer. Also avoid any loan offers where you are being asked to wire a payment to any individual or account as loans that are legitimate will not be offered to you in this way.

2. Another thing that should immediately be sounding alarm bells when applying for any kinds of bad credit loans are those where the lender requests payment of the fees upfront. It doesn’t matter what size of loan you want at no stage the lender should be requesting you to pay fees in advance even if they do claim that this will guarantee your loan application being approved.

3. The next thing to be looking at when it comes to avoiding such scams is where the lender will not actually carry out a careful check of your credit history. There is no actual guarantee that a loan is going to be approved unless you have a somewhat favourable credit score. If you come into contact with a lender who promises that they can offer you a favourable interest rate on your loan without first inspecting your credit history then there is every chance that this is yet another scam. Finally when it comes to searching out genuine bad credit loans look carefully at the lenders history. You should verify that the lender has the necessary licences and is registered with the government to provide such loans to you. If they are unable to provide this information then look elsewhere for your loan.

Searching For Bad Credit Loans Online

Searching for bad credit loans online has become easier. As lenders become more common on the internet, a number of individuals are learning about the opportunities that exist for finding loans online. From the privacy and comfort of your own home, it is now possible to search for lenders, compare their offerings, and apply for a number of bad credit loans online at any time of the day or night.

Of course, not all of the online loans that you find will be worth the trouble, so it’s important that you carefully consider the information below before you choose any particular loan that you find.

Online lending made easy

There are a number of lenders who offer bad credit loans online, but not all of them offer loans that are on the same level or feature the same amount of service to their customers. Ideally, you’re going to want to find a lender who will offer you a reasonable interest rate while allowing you a bit of flexibility in your payment options.

This way you’ll have a much better chance of being able to pay off your loan on time if not early, and will be able to save quite a bit of money over some of your other loan options as well.

Choosing your collateral

In order to get the best interest rates you’re going to have to use the right collateral. While some lenders may allow a number of different types of collateral to be used for their loans, many of the lenders who operate online prefer to have their loans secured using home equity or other high-value items that can provide additional security for the money that they lend while allowing them to offer lower interest rates than many people would be used to.

Carefully consider the value of any collateral that you might have, making sure that you choose a type with a higher value than the amount that you’re requesting for your loan.

Finding and comparing lenders

Since you can’t just walk into the storefront of a lender who operates online, you’re going to have to spend some time searching the internet for lenders who offer bad credit loans online. Use an internet search engine to find potential lenders, modifying your search terms if necessary until you find a number of different websites for online lenders.

Contact each of these lenders and request loan quotes based upon the amount that you want to borrow and the value of your collateral, and then compare these offers against each other until you find the loan that features the best interest rate and most flexible loan terms.

Receiving your loan and making payments

Once you’ve found the best of the bad credit loans online, you will most likely receive your loan money via an electronic deposit directly into your chequeing or other band account. Depending upon the lender you might have other options such as being mailed a cheque as well, though the electronic transfer method is generally faster and safer.

After you’ve received your money, you’ll have to start making your loan payments; these are generally made via an automatic withdrawal from your bank account each month, though different lenders may have other options available for this as well. Just make sure that you know a particular lender will accept your preferred payment method before trying to use it so as to avoid late fees or other problems.