Whether you are repairing your credit after a personal bankruptcy or trying to relieve yourself of crippling debt, predatory lenders may be setting their sights on you. Like other scammers, predatory lenders target the vulnerable and easily exploited – in this case, someone who needs a loan and has few options. You and other New York residents may protect yourselves by understanding how predatory lending companies work.
According to the New York State Attorney General, predatory lending involves the use of deceptive or unfair practices to lure unsuspecting consumers into substandard or abusive loans. Lenders like these usually go after those with poor credit or low income or who are minorities or elderly and easily exploited. Predatory lending companies may operate legally, or their actions can break consumer protection laws. When considering a loan, you should watch out for the following tactics that may be considered predatory red flags:
- High-pressure sales tactics
- Unsolicited mail, door-to-door sales or telemarketing
- High interest rates, surprise fees and hidden term in the contract
- Guaranteed approval of the loan regardless of credit history
The fact that predatory lenders exist should be enough to make you wary, but should not discourage you from seeking out a loan when you are attempting to reestablish your credit. When you make wise financial decisions, you stand a better chance of avoiding future problems. It can also help to seek counsel from financial advisors and others with experience in financial and bankruptcy matters. This information is not meant to replace the advice of a lawyer.