They’re out there, somewhere! They’re vicious, predatory and they’re after you. They can sense weakness and if they smell a tiny droplet of blood in the water, they’ll come at you with speed and ferocity that’s nothing short of terrifying. They circle around those with poor credit ratings or limited incomes. They are the loan sharks, and they’re to be avoided at all costs. They’ll sink their teeth in and drag you down into a spiral of never ending debt if you let them. Their practices are shameful, their ethics are dubious and even if they have warm and friendly looking websites, they’re pretty much always hiding something from you, whether it’s hidden fees or unannounced spikes in interest rates. But when life’s little emergencies spring up unannounced, like a clogged EGR valve or a blown head gasket in your car, a leaky roof or a broken washing machine, how can you pay for them, without swimming with these dangerous and unpredictable creatures?
Not all lenders are relentless predators- You just have to be able to spot the signs
Fortunately, there are many lenders whose practices are moral and equitable. In many cases you can even access their services if you have a poor credit rating. It’s simply a case of knowing where to look and spotting the signs of a reputable dealer as opposed to a shark. In most cases, if you own your own property you will be able to secure a loan using your property as collateral even if you have a less than stellar credit rating. Let’s take a look at secured homeowner loans from Evolution Money. This website is has several of the hallmarks of a reputable lender. Let’s break them down as follows…
- Clear and simple language used- Many loan sharks will try to bamboozle you with complex sounding financial terms without explaining them.
- Fees clearly identified- Less than reputable lenders will try to sneak in hidden fees in the small print, here the fees are clearly and honestly delineated.
- Terminology explained– The site links to a detailed explanation of a secured loan is and how it differs from an unsecured loan.
- Early repayment options- A loan shark’s perfect scenario is one where you’re permanently indentured to them, so they’ll create whatever barriers they can to prevent you from paying off your loan. A reputable dealer will allow you to pay your loan off early or with a lump sum.
- You are not guaranteed a loan- While it might seem like a good thing if a lender’s website guarantees you a loan regardless of your current income or whether you’re in negative equity, this can actually be a red flag. A reputable lender will need to be assured that you’ll be able to repay the loan while still managing your existing outgoings. They want to make their money back, but they also want to make sure that you’ll be able to live comfortably enough, too.
- Alternative products- Some lenders will try to push the best product for them onto you regardless of your circumstances. The website mentions circumstances under which a consolidation loan may be more advantageous.
Regardless of where you live, if you stick to the features mentioned above you will be able to find a loan that will enable you to manage and pay off your debts rather than allowing them to snowball and become an avalanche.
By all means use credit cards… But be smart about it
A potentially useful alternative to a secured loan may be a credit card. Credit cards can be an extremely useful lifeline or they can merely exacerbate matters and drag you even deeper into debt. It all depends on how well you use them. While they may be preferable to using loan sharks or payday lenders, they can still bury you under an avalanche of debt caused by fluctuating interest rates. Even if you have a poor credit history there are credit cards out there that will be available to you, and you will even be able to shop around for a card that gives you a reasonable rate of interest. Here are some of the best cards of 2018 for applicants with poor limited credit history. In many cases, while you may need to wait a few days for the physical card, you will be given the number immediately upon approval so that you can pay your emergency costs and get back to your normal life as quickly as possible.
As with loans, however, you should be wary of any credit card company that does not allow you to make an early or lump sum repayment, as this is a sign that they’re just trying to make as much money out of you as possible in interest.