Save Yourself by Avoiding These Bad Credit Loans

bad credit, to purchase something or draw more credit, it’s wise to be hesitant of that lender. These companies are often searching for people who are in financial trouble because they perceive them to be easy and vulnerable targets.

Credit loans can be tempting for consumers seeking debt assistance, but there are five types of credit loans that are best avoided because of their reputation for exploiting debt issues rather than improving them.

Payday Loans – With proof of income, this type of loan is designed to be repaid upon the arrival of the borrower’s next paycheck. Unfortunately, the cost of repaying the loan does not leave enough income for the borrower to also pay bills, meaning they’ll need more payday loans to make it to their subsequent checks.

Auto Loans for Bad Credit – Vehicle salesmen work on commission, so some of them will push inadvisable loans if it means they can make a sale. Steer clear of any auto loan that’s set at 10% interest or higher or requires more than five years to pay off. The vehicle’s depreciation and bleak refinancing options mean it may become worth less than the amount owed.

Auto Title Loans – Consumers borrow these loans when they’re looking to make quick cash by leveraging their vehicle as collateral. Basically, they will lose their car if they can’t pay back the loan. Not only is this a risky prospect, but the sky-high interest rates are nothing short of a scam.

 

Mobile Home Loans – These loans are designed to prey on low-income borrowers who feel they can’t afford a house but who desire more privacy and ownership than apartment living. Ironically, after considering the fast depreciation of mobile homes and the ridiculous interest rates, consumers may actually fare better paying a mortgage.

Personal Loans for Bad Credit – The business plan for selling personal loans to those with bad credit is simply to charge more interest than the amount originally borrowed in order to turn a profit. Some of these companies even sell life insurance to guarantee you can pay your debt posthumously should anything happen to you!  CreditCards.com