There are so many occasions in life and sometimes problems when you need loan. But always be careful while taking loans. When you need loan, take it from honest and recognized lenders. Avoid predatory lenders for a hassle-free life. Don’t fall prey to dishonest and aggressive lenders who are out in large numbers in the market. Through their attractive advertisements, they try to trap those people who need urgent loan to make payment for property tax, medical bills or those who want to do costly home repairs.
Their modus operandi is simple. Instead of offering a fair loan, these lenders use smooth-taking sales persons whose loans carry high interest rates, outrageous fees and unaffordable repayment terms. These sales persons are quite smart enough to trick you to take loans that you cannot afford to repay. The result is sometimes shocking. Some people even lose their homes to foreclosure. That’s a high price to pay for choosing the wrong lender. So, avoid lenders who call you and promise guaranteed, low interest loans, who take applications over the phone or who offer the next day approval if you pay them some money today. The first and foremost thing you should do when you need a loan is to shop around. If you need a loan, start by asking the local bank, credit unions or mortgage companies whether they will give you loan. And when they agree to pay you the loan, compare the costs of the loan as well as interest rates. Study them until you understand them.
Before borrowing money, know exactly what the lender is offering. You have a legal right to have in writing the total cost of the loan, the annual percentage rate, the monthly payments and the duration of payment. Always ask questions until you get satisfied. Ask the lenders to explain all fees and points. Before signing the form, be careful. Always avoid “balloon” payments. It is generally seen that one way that lenders make loans sound very good is to make the monthly payment small but at the end they ask you to make a balloon payment. Dishonest lenders may promise to help you refinance when it comes to pay it off but check out. Predatory lenders make money by charging excess fees every time they refinance the loan and they will encourage or trap you to refinance often. But if you are above the age of 62, consider reverse mortgages. It is beneficial. A reverse mortgage may be better than getting a home equity loan. A reverse mortgage which is based on the equity you have built up in the house over time gives you money that you don’t have to repay until you move, sell the house or die. You can choose to get the money as a lump sum payment, a monthly income or a combination of both. The benefit of reverse mortgage is that, you can’t lose your home to foreclosure the way you could with a home equity loan.
So, don’t put your dreams, aspirations and life at risk when you apply for a loan. Read the offer document carefully. Always remember that any paper you sign will be deemed as a contract. There is no need to worry about. If you don’t like the contract or can’t agree to certain points, you always have the option to get a loan somewhere else. Before signing the loan papers, ask a lawyer or trusted friend to accompany you and make sure you never sign a blank document. There is glimmer of hope for those people who have signed contracts using their home as a security; the truth in lending act allows you to change your mind for any reasons within the three business days of signing the contract. If you change your mind, put it in writing and mail to the lender. Incase you get an unfair loan; don’t hesitate to contact your county office of consumer affairs or your State Attorney General’s office. |
