Why is Responsible Lending Important

If you are a part of what is known as the middle class or the working class, you don’t need to be told that times have been hard. The entire world has been on the brink of financial calamity, and unless you are lucky enough to either be born with a spoon in your mouth, or you have a couple of golden geese you have felt the pain.

Responsible Lending

People everywhere are seeking relief from the stress of financial instability, and there are a host of responsible lenders to choose from that offer valuable services and products to customers when they are in need of help. Unfortunately there are also far too many companies that have set up shop in neighborhoods, and they are more than willing to take advantage of you if you are desperately in need of financial assistance.

These companies are known as predatory lenders. Responsible lenders are important because they offer a safe and legal alternative to the predatory lender. Predatory lenders are responsible for thousands of foreclosures every year.

How They Do It

Predatory lenders set their sights on people who might have too many blemishes on their credit reports to just stroll into a bank and take out a traditional loan. They promise potential borrowers that they will give them the unsecured loans for example, that they need to purchase a home, buy a car , or pretty much any other reason, and then once the borrower signs on the dotted line, the rug is then pulled right out from underneath them. For the most part, when people think about predatory lending, they generally think about pay day loans, and sub prime mortgages, but don’t be deceived.

Predatory lending can happen with any loan situation. Those who engage in the practice of taking advantage of others through the practice of predatory lending are constantly thinking up, and implementing new ways to take advantage of you. The prime targets of these types of loans include: the elderly, people with limited education, minorities, immigrants, any anyone that they figure have a limited ability to pay their high interest loans back.

What You Should Look For

Watch out for lenders that try to pressure you into borrowing more money than you know that you have the ability to pay back. Use your common sense, and do your own math before you go anywhere to borrow money from anyone. You know better than anyone what you can afford and what you can’t.

Walk away from lenders that try to pressure you into falsifying information on a loan application, or ask you sign documents that have blank spaces on them.

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