Predatory lending is any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower doesn’t need, doesn’t want or can’t afford.
These actions include calling me and threatening to send my information to the collection bureaus. Tacking on seriously high “penalty fees” like late fees and “payment processing fees” as well as “payment unable to be processed fees”. I fully intend to pay back the money I have borrowed. Although it just may take longer then originally anticipated. So lets have a look at some of the companies I recommend that you avoid with all your strength no matter how attractive the option seems, it is better to just go out and do day labor if possible then deal with these companies.
Lets start with Rise Credit at https://www.risecredit.com
Fortunately for whatever reason their website would not allow me to complete the process to actually get their loan, but their terms were as follows. Borrow 1000.00 and pay some sort of fee that brings the total amount due back to the lender and Rise to over 3000.00 whether it is payed off early or not. So basically it was once the loan was accepted, it ended up costing over 2000.00 no matter how soon I could pay it back. That is predatory.
. Beware of this company. They are very transparent about their terms, but if you go late even for a day, expect to be contacted by phone numerous times until you speak with them about it. They also will require that you link your checking account to their company for Automatic Deductions. Never mind if for some reason, you cannot get the money in there in time. They are going to initiate a transfer. And if you do not spend the money with your bank to “stop payment” they have no problem initiating the transfer anyway and you still end up paying extra fees.
These guys tried changing the payment location twice on me at the last moment in an effort to try to make the payment go late and collect additional revenue from my loan. How’s that for an underhanded tactic? They also reported inaccurate information to all three Credit Bureaus about how many accounts I had with them. They also like to initiate phone calls prior to the actual date the loan payment goes late. So they will actually call you one day after the due date and start asking for the payment. Then after all this, they stated over the phone that they could extend the due date on the payment. But only if I agreed to pay it back at a lower payment rate for a longer amount of time. They did not disclose that was the plan, until after they ran another credit inquiry and I asked them why. This would have resulted in extending the loan and them collecting an additional approximately 45% interest on the original loan. Clever, but quite predatory.
There are any number of payday loan companies and title loan companies in operation as well. Avoid these companies. I can assure you that it is not worth it. I tried one of these once cause the car needed new brakes. I ended up paying back over 1000.00 for a loan that was for 400.00 all in the matter of 3 months. So the company made 600 dollars for lending me 400.00 for 3 months. That is ridiculous.
I am sure that most readers have received these pre-approved offers from any number of companies offering Credit Cards. Generally, almost all of these offers are going to cost you a bunch of money in the long run. The list of these predatory lenders goes on and on, from Department Stores and Oil Companies that offer easy access to Credit. Target, Walmart, Goodyear, and countless other large retailers and Gas Stations will offer you easy credit, but like the Theme Song from the show Good Times
said, they are all “easy credit ripoffs”.
While I was in college, I also encountered a number of lenders who were willing to encumber me with Credit Cards despite the fact that I had little to no income. Any Company that offers a Credit Card to a College Student based on future earnings is predatory in my opinion. I am not going to bother identifying these sharks, but suffice it to say it cannot be right.
Have you had any experiences with a predatory lender? Feel free to identify them in the comments below. Also, feel free to join me in discriminating against the money hungry corporations that have no sould or conscience. And finally, always read the fine print.