Facts About Credit & Loan Offers

Anybody can have credit problems! The cause might be laid off, recent divorce or may be simply running out of cash. In this circumstance a telemarketer can call and offer you a credit loan with a credit card with low interest rates or a small loan. Then you go through a painstaking process of questions and answers and accept the offer since the amount is pretty less. But eventually you never get the credit card or the small loan and end up spending more time and money for the same. According to Federal Trade Commission these scam cases amounts to almost $100 million per year in United States.

As per FTC a poor credit loan is considered to be illegal in the country. If a person comes across an ad in the newspaper or receives a call he or she should contact specific authorities for the same, which in most cases is ignored and hence the operation continues.

Precautions to be Taken:

For credit and loan offers of this kind an intelligent person should look for proper signs. One of the signs of a fraudulent lender is that they generally go ahead with the process without any proper documentation and validation of the client, whether they can pay back the loan amount. The interest rate that is being offered also serves as a significant clue. One should be aware whether a particular interest rate is not exceeding any standard placed by the state to avoid injustice. With respect to refinancing loans and mortgages or there are many regulations that should be followed and treated seriously.

There are various kinds of loans available in the market. They are pre-approved loans, personal loans, credit cards, car loans and home loans. Whatever be the type of the loan a person can get it only by fulfilling and validating criteria that has been set by the bank or the loan providing company.

Being Eligible for a Loan:

In normal cases a bank judges the eligibility of a client for a loan which is pre-approved. This is specifically based on the history of the client. For example in case a person has a salary account in a particular bank he or she might be eligible for a loan of this kind. Also the amount in the savings account might be a valid criterion to determine whether the individual is eligible or not. This holds true for the transaction history of his or her credit card. To make it more secured the bank can also perform an asset quality check which signifies the kind of asset the person is trying to buy using the loan amount. For example, the kind of house or car he is planning to buy. The disbursement of the loan amount can happen only when all these predetermined criteria are fulfilled.

There are other warning signs which include, personal solicitation offers, high closing costs and even necessity of the borrower to get an insurance or credit card. A lender who offers repeated financing should never be trusted. Every step should be validated with proper authority and should have written documents of all commitments made during the offer. A credit loan can be determined by being vigilant and smart while choosing a good contract.