What to Do after Becoming a Victim of Predatory Loans

Predatory lending is pervasive across the UK. It involves dragging you into a transaction that you did not expect. Anyone, direct lenders, brokers, mortgage lenders, can perform predatory lending practice. It is not the same as scam. Such loans are real loans but terms are very hard to meet. Asset-based lending, bait and switch, balloon payments, payment penalties are some of the features of such lending process.

Many borrowers think that such practices are mainly commonly among those lenders and brokers not registered with FCA guidelines, but this is a myth. Anyone can follow such practices and they are very common among those who want to earn high amount of profits. Note that products themselves will not be predatory, for instance, Very bad credit loans no guarantor no broker  with amortisation facility can be a great option, but you can be a victim of bait and switch practice that binds you to pay off the principle in lump sum at the end of the term.

Predatory lending is very harmful because of following reasons:
·         You will end up paying outrageously high interest rates.
·         The debt will continue to mount up.
·         You may lose your asset if you have secured it.
·         The lender can issue a CCJ against you.
You can fall prey to a predatory loan after responding to texts and emails promising loan deals with lower interest rates. It preys on the low income, the elderly, minorities and other groups who are desperately seeking financial assistance. Here is what you need to do after becoming the target of predatory loans.

Know how you can get out of it

You cannot sue your lender because you have signed into a contract. Of course, it was your responsibility to peruse the contract before signing into it. You owe the lender and you have to pay back the debt. Now you need to figure out how much amount you need to borrow to pay off your previous debts. However, you cannot ignore the importance of repayment capacity. If you have a positive net worth, you are likely to borrow some money, but it is impossible to get out of debt when you have a negative net worth.
Before you submit your loan application, you should evaluate the amount of your assets and liabilities. You also need to have a stable source of income to make sure that you do not fall behind repayments. There are various short-term loans , which you can take out to pay off the full amount of your predatory debt.
Chances are your lender does not let you borrow money because of your bad credit rating and existing outstanding debt. In such  a case, you should secure your loan. This will not only help you get a loan at a lower interest rate but also a large amount of money.

Know the experience of others

Many people share their experience on social media. They will let you know how they got into a predatory debt cycle and what steps they took to get out of it. You will get genuine and effective tips to get rid of unwanted debt. Join forums where financial experts answer to the queries of borrowers. Post your real problem query to seek guidance.

How to know you are going to becoming a victim of a predatory debt

Once you are out of your debt, it does not mean that you cannot get into the same situation down the road. A reliable lender will never send you promotional messages and emails. They lend money only when you apply for a loan. Beware of loan companies that badger you with a barrage of texts. Before you sign into a contract, make sure that the loan does not charge very high interest rates.
Compare loan offers before choosing the one. Do not believe if somebody advertises “bad credit loans” as a “lower interest rate deal”. Financial institutions often do not disclose late payment fees and interest penalties unless you ask them. Make sure that you know very well how your loan works. Go through the contract carefully before signing it.

The bottom line

You can get out of the predatory debt if you know your borrowing power and you look for affordable loan products with direct lenders who consider bad credit borrowers.

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