Thanks to the savvy nature of the lies that some predatory creditors and lenders like to tell, it's easy to fall into the trap of this unhealthy loan process. Some predatory creditors offer a very low initial interest rate, only to jack it up very high after a brief period of time. Others offer many other promises that they can't deliver while others turn to harassment when overwhelmed debtors cannot pay back the money that's owed. Before accepting any credit card offer or loan, consider these lies that predatory creditors like to tell.
Lie #1: You Won't Be Able to Get Credit Elsewhere
Scare tactics are a part of many types of advertising, but predatory lenders seem to take this up to the highest notch. While you may have difficulty getting credit with some mainstream companies, it's possible to get secured credit cards with a reputable bank or finance company no matter what your credit score may be. That can help you rebuild your credit just as well, if not better, than taking out a predatory loan or credit card. You can also seek help with a financial guidance center, where you can receive help with your money problems.
Lie #2: You Have to Accept Extra Features
Some other unethical lenders like to say that you have to accept certain extras with your high-interest credit card. Those extras can include products like credit insurance that are not required by law, and they shouldn't be pushed as a must-have in order to get a credit card or loan. If a creditor will not let you simply take out a loan or credit card without demanding that you accept tacked-on extras, take some time to consider the situation because it's probably not worth it.
Lie #3: You Need to Agree to Mandatory Arbitration
Some predatory creditors will add a clause into your contract that would require you to sign away your right to pursue future legal action against the company for fraud or other reasons. The only option you would then have would be arbitration outside of the courts, which would probably put you at a great disadvantage. You should not sign any such agreement, and it's a red flag if any company demands that you do.
Finally, it can be difficult to recover from a period of financial strain, but it's within your power to turn the bad situation around. With help from a consumer finance center, you can start on the path to building a healthy financial future.