A personal credit loan is a financial tool that many people in different countries use. It is often an instrument that helps solve financial problems in the case of an emergency. However, not all lenders are credible and trustworthy. Some microfinance organizations and even banks can turn out unscrupulous. “Black” lenders can change the terms of the loan as they please, set any rate for interest, demand a return of the debt the next day and pressure the borrower in all possible ways. To avoid falling into the hands of such creditors, you need to follow a few simple rules.
Check the license
The first thing you need to do before taking a personal credit loan in any financial organization is making sure it is legal. The only document that can prove it is a license. Each country has different regulations. However, there is usually a register of legal financial institutions certified by the main bank of the country. Without a license, it will be very difficult to protect your rights and win the case.
You can also assess the activity of the company in the media. Any microfinance institution cares about its reputation, its attractiveness for the customers depends on it. Therefore, trustworthy companies are usually open to dialogue: they provide expert comments, conduct research, write columns, etc. Such institutions deserve more trust.
Read the agreement carefully
It is a hard rule: before signing anything, you should always read it carefully, especially when it comes to any form of a financial relationship. You should carefully read the contract with the institution issuing a loan. The wording should be clear. There should not be any discrepancies and dual interpretations. In online services, documents are in the public domain. They cover all necessary detail of the procedure before concluding an agreement and issuing a loan.
Read the reviews
Before making your decision about which company to use as a lender, take your time and read the reviews. It will not only help to determine if the institution is legal but also their relationship with the customers. Remember, that the positive reviews on the website of the organization itself do not account too much: they can easily be fake. That is why we recommend searching for independent sources. There are usually forums where people share their experiences with different banks and microfinance institutions. Moreover, if a company has frauded a customer, there is almost always information about it on the internet.
Another thing that should be a huge red flag is excessive persistence. If you feel that the organization is pressuring you into taking a loan and trying to hurry you up, there is a decent chance it is a fraud. We recommend ending any conversation with such an institution. Moreover, if you were pressured into signing anything, you can go to court: predatory lending is a criminal offense.
Before taking a personal loan, make sure you are informed. It is a serious commitment that should not be taken lightly. These five pieces of advice will help you detect unscrupulous lenders and stay away from them.