Choosing a lender that’s right for you

Once you’ve determined that financing is needed, the next step is to find a lender to meet your needs. Here are several steps to take when choosing a lender while staying safe.

1. Take a look at what options may be available from your current financial institutions that you currently bank with.
2. Shop around and compare rates and terms.
3. Check what the application process entails. You should understand how much time it may take to get a credit decision and access to funding. This can be especially important if time is critical to finance your needs.
4. Avoid pushy sales tactics or pressure. Remember, you can always say you have to check with someone else before selecting a lender.
5. Be mindful of any documents with your signature. Avoid signing a blank document or anything the lender promises to “fill in later.” If there’s a document or terms that you don’t understand, be sure to ask questions and have them talk it through with you before you sign something.
6. Check the total cost of financing. While a longer-term loan can help to lower your monthly payment, be sure to check how much in interest you may pay over the life of the loan.

What is predatory lending?

Predatory lenders impose lending terms that are unfair, misleading, or abusive to the consumer. The risk of predatory lending is a risk for anyone, including those in need of cash or financially struggling.

Predatory practices can take various forms, such as short repayment terms and high fees that may be challenging for the borrower to repay.

How can I protect myself?

Make sure to research the lender. When applying online, check that the website is legitimate. Also make sure you know and understand the terms and conditions of the loan.

Scammers may guide people through phony applications and fake loan documents. Check for warning signs of potential fraud and scams.

For more information and help on predatory lending, start with the Consumer Financial Protection Bureau or the Federal Trade Commission.