The Dangers Of Introductory Loan Rates

The Dangers Of Introductory Loan Rates
If you​ are tempted by an​ offer of​ a​ loan that seems ‘too good to​ be true,​ then it​ probably is​ .​
Although there are many excellent loan rates and offers out there,​ it​ pays to​ be cautious about introductory loan offers .​
Being cautious will help you​ to​ avoid being conned and ending up paying more than you​ should .​
If you​ want to​ know how to​ separate the​ good offers from the​ bad,​ then here is​ some advice for you.
Advance fees for a​ low rate
Once trick you​ should avoid is​ the​ companies who ask for an​ advance loan fee which will be returned to​ you​ after a​ period of​ time,​ and in​ exchange you​ will get a​ really low interest rate .​
These companies are usually bogus,​ and you​ will probably never hear from them again,​ having lost your advance fee and received no other funds .​
Always make sure the​ companies you​ apply for loans from are reputable companies with an​ excellent history.
Low rates but high fees
Although some low rates really are low,​ they come with other hidden charges and fees that will cost you​ large sums of​ money .​
You might have to​ pay large processing fees,​ or​ the​ fees for late payment and early repayment might be extremely high .​
Before taking advantage of​ the​ low loan rate,​ make sure that the​ other charges are not going to​ cost you​ huge amounts of​ money.
APR advertising not always true
Although you​ might see a​ great offer for a​ loan,​ the​ APR that they advertise might not be the​ one you​ can actually get .​
This APR is​ probably true,​ but is​ only given to​ people with perfect credit records over a​ certain period of​ time .​
In general,​ the​ APR you​ can get will be higher than this,​ meaning the​ loan will not be as​ great an​ offer as​ you​ think.
Pre-approval letters
Another danger when looking at​ introductory loan offers is​ pre-approval letters .​
Although less common than credit card letters,​ getting letters through the​ post guaranteeing a​ great loan are getting more common .​
All you​ have to​ do is​ fill in​ the​ form and you​ will have the​ loan .​
However,​ the​ lenders might employ the​ ‘bait and switch’ technique .​
This means that the​ amount you​ are ‘pre-approved’ to​ borrow at​ the​ great interest rate will be replaced with a​ lower amount at​ a​ much higher rate .​
You have already signed the​ agreement and might be stuck with the​ loan .​
Make sure that with any loan you​ apply for that you​ are really getting what you​ want.
Good offers are out there
Despite the​ dangers,​ there are plenty of​ great offers available .​
Lenders are more eager to​ lend you​ money than ever,​ and are consistently reducing their interest rates in​ order to​ entice customers .​
The only danger with this is​ that you​ will borrow more than you​ can really afford to​ repay,​ which will leave you​ in​ serious financial difficulty .​
However,​ as​ long as​ you​ shop around for a​ reputable loan deal and borrow only what you​ can afford,​ you​ will avoid the​ dangers of​ introductory loan offers.

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