Unscrupulous Bad Credit Loan Brokers: 2 Red Flags

Bad credit loan brokers provide a way for borrowers with bad credit to access loans in order to meet their financial needs. Many of these brokers provide a good service and are beyond reproach with respect to their ethics and their ability to provide good, honest service for their clients. A few brokers out there are dishonest and should be avoided. Here are a few signs to watch for in order to detect an unscrupulous bad credit loan broker.

Bait and Switch

Brokers that make an offer to you for terms that seem too good to be true and change those terms once you sign the loan documents should be avoided. The new terms tend to carry additional charges and fees or have a higher interest rate than what you believed you would be receiving. This process, known as bait and switch is illegal in all states and is an easy fraudulent practice to detect.

No Income Verification

A broker that does not ask for a lot of documentation or request verification of your income may be placing information on the application that is untrue or does not reflect your current financial situation. This may result in you receiving a loan that you are not otherwise qualified for and may not be able to afford to pay.  

You should look for these signs when dealing with a bad credit loan broker and report and suspicious activities to the appropriate authorities or regulatory officials.

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