It’s very important that before entering any type of loan agreement, you know that you are dealing with a reputable company, especially if what you’re after is a bad credit loan. This is because many of bad credit lenders today may take advantage of the fact that the borrower has had difficulties of obtaining loans in the past, and that any rate offered will most likely be grabbed by the borrower out of desperation. The key is to be aware of your rights and to transact with good lenders by observing the following:
Check the Company’s License to Operate
Before proceeding any further, it pays to check if the company is authorised to operate beforehand. You’d want to verify the legalities that back up the business and check if they are registered with the CCA (Consumer Credit Association). It’s also wise to check for reviews or complaints from other users.
Check the Company’s Rates and Compare across Other Lenders
One criteria that a company is reputable is if the rates offered are reasonable, even for someone with less than perfect credit. While it is a known fact that loans for borrowers with poor credit are higher than average, these lenders still have varying rates. A reputable company will look into your application first to see what rate is fair for your personal circumstances, rather than give you a price upfront without looking at your situation.
Study the Terms and Conditions of the Contract
No matter if you’re on the rush to get your money, you should always pay close attention to the fine print, so that you know the factors that might affect your contract. If you have a guarantor, it would be helpful if the two of you review the terms together so that you know what activities or factors could influence your contract, avoiding possible problems in the future.
Pay Attention to the Company’s Customer Service
A reputable company will go the extra mile to attend to every customer’s needs. They will give importance to what their customers say and will try their best to respond to queries in a timely fashion. If the customer service takes too long to respond, or you notice that your request is transferred from department to department, that could be a red flag that the company does not care about its customers.
Lenders or Brokers?
There’s nothing wrong with applying direct or going through a broker, but you have to be aware of the differences, as well as the pros and cons.
When you apply with the lender directly, you may be able to get cheaper rates, because there are no broker commissions. There’s also the assurance that you will communicate with the lender’s representatives directly. However, the downside with this is that you need to check out the lenders one by one.
On the other hand, going through a broker is a nice option if you want to save time. Besides, using a broker does not necessarily mean that you’ll have to pay more. In most cases, brokers get their commissions from the lenders themselves, not from you.