In this modern digital age, people are becoming more and more comfortable managing their money online. Online lenders are emerging to make access to cash easier, more convenient, and much faster.
The problem is, there are predatory lenders that have seized this opportunity as well and it can be hard to tell the difference between a trusted lender and a shady lender.
Let's discuss online loan options to help you figure out who to avoid and who you can trust when you need fast cash...
Predatory lenders promise “Guaranteed Approval” regardless of credit score
What's the attraction of a no credit check loan with guaranteed approval?
For many bad credit customers who can't get bank loans, this type of loan service offers an easy path to quick cash without a hard credit pull.
Major banks probably won’t lend to you if your score falls under 600. And of course, wisdom stands that if you don’t want your credit score to get worse, you won't apply to every lender because pulling your credit report with might damage your credit score with each application.
Some lenders offer “no credit check loans, guaranteed approval”, but the cost of borrowing is incredibly high. These lenders are irresponsible in their lending practices and may try to swindle you with hidden fees, terms, and conditions. They often lend whatever they want and charge whatever they want. If you can’t repay, they’ll report your delinquency to a collections company.
These lenders are predatory in nature because they focus on customers in desperate situations. They offer “guaranteed approval” to hone in on your need for quick cash without a credit inquiry.
Aside from the unbelievably high interest rates that you see on many payday lenders' fine print, here are 5 other warning signs that you're dealing with a predatory lender.
5 warning signs of a predatory lender.
Warning sign #1 - The lender is not licensed
Each province in Canada has strict rules about consumer lending, so check to see if the company you’re submitting an application to follows these rules. Click here to check out the Government of Canada’s Consumer Services website on the matter.
Warning sign #2 - The lender is pressuring you to sign
We had to make this the first sign of an irresponsible lender. It’s one thing to check-in on your application. It’s another thing to be hounding you constantly, (and perhaps, depending on the marketing laws in your area, illegally) to accept terms and conditions that are less-than-savoury.
Warning sign #3 - The lender is charging you with hidden fees
Have you booked a hotel room recently? Isn’t it annoying when the total price you pay is a lot higher than the advertised price? It’s a bait-and-switch situation; you think you’re getting a great deal, but when it comes time to sign on the dotted line, there's some fine print you didn't see. You end up getting stuck paying more than you initially wanted to.
While every company has operating costs, those costs should be communicated clearly to the consumer. It should be easy to understand immediately and be completely transparent. The last thing any of us want is a surprise when it comes to money (unless it’s a lottery win!)
If you go through an application process online, a lender should disclose the total cost of borrowing and it should be a final amount—no ifs, ands, or buts.
If there’s anything extra to pay or hidden surprises, choose another lender.
Warning sign #4 - The lender doesn’t ask about your income
When it comes to the “guaranteed” aspect of the loan, if the lender doesn’t need to check your credit, you should be asked for proof of employment and income. If you don't get asked for this information, then you may get approved for way more than you can afford to pay back. Lenders do this because of the insane interest and fees they can charge you.
This is not responsible lending. Responsible lenders will take the time to understand what you can reasonably afford to pay back.
Warning sign #5 - You can’t talk to a real person, even if you wanted to
The lender should always have an open line of communication available to its customers, as is the case with responsible lenders—like Fresh Start Finance. You can speak with one of our consultants by phone, email, or even text.
That said, if you’re searching for a loan online and the lender you’re looking at doesn’t even have a phone number to call, you should choose a different lender.
Get a fast loan from a responsible online lender
If you're a Canadian with bad credit, there are better alternatives to "no credit check loans with guaranteed approval."
When you need easy access to fast cash, a personal installment loan from Fresh Start Finance is the right choice:
- All credit scores welcome: We do check credit but we also approve loans for EVERY credit rating.
- Loans up to $15,000: When the banks say no, Fresh Start Finance says YES! Choose how much money you’d like to borrow and get approved for any amount between $600 to $15,000!
- Simple application process: Apply online in minutes. Our application is open 24/7! You can also speak to a live representative by phone, email, or text message.
- Incredibly fast approvals & transfers: Funds are deposited into your bank account usually within 24 hours of applying.
- Customizable repayment schedule: Avoid payday lender’s tight repayment timelines! With Fresh Start Finance, you decide how much to pay back every month. You can spread your payments out over 60 months if you want!
- Full transparency: No application fees, maintenance charges, and hidden costs ever.
- No appointment required: Online applications mean you’ll never have to wait in line at a bank or payday loan shop.
- Safe & secure: State-of-the-art security technology means your data is under lock and key.
- Canadian: Fresh Start Finance is based in Vancouver and serves people across the country.