Avoid Payday Advance Loans
Predatory lenders use your financial need to take advantage of you. They offer loans with terms you can’t meet, no matter how good the deal sounds.
You should find a trustworthy lender them, not them to you. Interview many lenders and compare prices before you choose one. It’s your legal right to have everything in writing. Ask questions until you understand everything.
- Don’t sign anything you don’t completely understand, especially the total cost of the loan. Your loan is more than just the principal payment. It includes costs like interest, and possibly a down payment, insurance and taxes. Before you sign any paperwork, ask a trusted friend to go over it with you. Always assume that any paper you sign is a contract. Don’t sign a document with blank spaces because anyone could write anything in there later. Get copies of all the papers you sign.
- Don’t sign up for a loan or mortgage that must be refinanced in a few short months or years. If a predatory lender tells you your loan will need to be refinanced after a certain amount of time, that will mean added refinancing fees and costs—something you don’t want or need.
- Make sure there are no extra costs attached. Your loan should not include life or disability insurance, or other products you don’t understand or want.
- Don’t agree to lie on loan documents. Don’t let the lender pressure you into lying on your application. Make sure all documents are complete, truthful, and have the right dates.
- Don’t feel pressured – if you’re not sure, don’t sign. Talk to a free consumer credit counseling agency if you need help finding a fair loan.
- You can change your mind within three days. If you’ve already signed a contract that uses your home as security, you can change your mind within three business days of signing the contract. You have to write a letter that explains your reason and mail, fax, or hand-deliver the letter to the lender.
How to recognize a predatory lender:
- The lender says this is your only chance to get a loan
- The lender tells you refinancing can solve your credit problems
- Closing costs are not what you agreed to pay
- You are given a blank contract to sign