As the prices for necessities like gas and food continue to rise, predatory lenders are taking advantage of struggling people by charging outrageous interest rates and fees. Don’t let them entrap you — there are ways to protect yourself from predatory lenders. Learn how to identify them, what to do if you’re contacted by one, and how Resolvly can help if you’re struggling with high-interest debt.
What Are Predatory Lenders?
Predatory lenders offer loans at extremely high-interest rates, often without regard for the borrower’s ability to repay the loan. They’re typically more interested in making money off late fees and penalties than helping you get ahead.
How Can I Spot a Predatory Lender?
There are a few key things to watch out for if you think a lender might be predatory:
Many predatory lenders charge exorbitant interest rates, sometimes upwards of 400%. If a lender is offering you a loan with an interest rate that seems too good to be true, it probably is. What is the Commodity Futures Trade Commission?
Lack of Transparency
A good lender will be upfront about all of the charges associated with a loan. If a lender is being vague or refusing to answer your questions, that’s a red flag.
Pressure to Borrow
A lender should never pressure you into borrowing more money than you need or can afford to repay. If a lender is pushing you to take out a larger loan than you’re comfortable with, that’s a sign that they’re not looking out for your best interests.
Inflexible Repayment Terms
A great lender will work with you to create a repayment plan that fits your budget. On the other hand, a predatory lender might have inflexible terms that make it difficult or impossible for you to repay the loan.
The Effects of Predatory Lending on the Economy
While predatory lenders might seem like they’re just taking advantage of desperate people, their actions can have a ripple effect on the economy. People defaulting on their loans can lead to higher interest rates and stricter lending standards for everyone.
This makes it harder for people to get loans for things like cars and homes. Predatory lending can also create a cycle of debt that’s difficult to break free from.
What Should I Do If a Predatory Lender Contacts Me?
If a predatory lender contacts you, saying no is best. Please don’t give them any personal information or agree to anything. You might also want to report them to your state’s attorney general or consumer protection agency.
How Can Resolvly Help?
If you’re struggling with high-interest debt, Resolvly can help. Resolvly LLC is a Florida Bar-approved company that helps individuals countrywide connect with consumer protection lawyers. If you’re struggling with high-interest debt, call us today or visit our website to see how we can help you. We offer free, no-obligation consultations to use our services.