Online Loan Scams Could Lead You to Bankruptcy
Online loans are a way that predators prey upon those who are down on their luck or struggling with financial problems. But online loans are often a scheme to try and get the most out of people in their time of need when they are vulnerable. It can mean committing to astronomical interest rates or terms that make it close to impossible to pay off. And this leads to seeking an Arizona bankruptcy attorney to help you find financial stability again.
Spotting these online loan tactics can help you protect your finances and avoid bankruptcy, which can have severe and lasting impacts on your credit score and financial viability. Here are a few ways you can watch out for online loan scams to avoid becoming a victim.
Click here for an article on loan scams to avoid.
How to spot online loan scams
Before you go seeking an online loan, learn how institutions prey on people just like you. The more you know, the easier it will be to avoid these scams and stay financially stable.
- You see an ad showcasing the fact that the lender does not do a credit check. If it seems too good to be true, it probably is. Ads that tout no background checks are loans that you don’t want. If the lender does not care about your financial stability, they aren’t expecting a normal lender relationship with you. Walk away from this loan option, no matter how much you think you need that money.
- Lender information only features the cost of your monthly payment and no other terms. When the lender only focuses on what your monthly payment could be and how low it is, be very wary. The information that these institutions are hiding is generally how long the loan period is. You could get trapped in extremely long loan periods where your interest rates are incredibly high even for a small loan.
- The lender is offering loans for anyone regardless of credit score, but the interest rates are incredibly high. Be very careful in these situations. In some situations, a $100 loan could mean repaying that lender with $500. Those types of loans threaten your financial stability immensely.
- The lender gives you too much time to pay the loan back. The way interest works, you pay a certain percentage of the total loan amount each year. So, the longer you take to pay it back, the more money the lender gets back from you. If very small loans are saddling you with a 10-year payback period, you should dig deeper. Learn more about the interest rates you’ll be paying and how this will affect your finances.
- Contracts with lenders allow you to take out a second loan to pay for your first. Online loan predators often place you into a vicious cycle of getting additional loans to pay off other loans. Finally, you find yourself in a situation where you must sell your home or your car to pay off the loans on top of loans that you now owe. When lenders promise you that they’ll keep loaning you money, walk away. That’s a scheme to get tons of money out of you.
What to do if you’ve become the victim of an online loan scam
If you’ve become the victim of an online loan scam, get out of it as soon as possible. Failure to do so could leave you in Arizona bankruptcy, which will take several years to recover from. While this might mean making sacrifices to your standard of living, it will be worth it, in the end, to get these predators far away from you.
If you find yourself in so deep that you need an Arizona bankruptcy attorney, contact us. We’ll help you do what’s best for your long-term finances and become as financially stable as possible throughout the process.