Consolidation Loan

I Need Your Help to Find a Loan Company Who is Legitimate

Written by Steve Rhode

Question:

Dear Steve,

I left a 13 yr 3 children domestic violence marriage in Jan of 2013, apprx 3yrs and 5mnths ago I started to work on my fixing my credit.

That said, it started with a capital one credit card, since I have acquired a second capital one, next a FCU secured loan for a vehicle, then went from that to a secured loan with One Main Financial which offered a slightly better interest rate with hopes that customer service would at least be somewhat better as well.

I’ve had only one instance with One Main that wasn’t pleasing but the end result put a bandaid on it.

I then opened a non-secured loan apprx 3.5 mnths ago with a higher interest rate to step forward and pay off the derogatory accounts holding me back with credit score increase.

With all that being said, I am now wanting to consolidate both of those loans into one with payback from 36 months to 60mnths personal loan with hopes of a better interest rate with my goal to homebuying.

The children and I have rented successfully the last apprx 6yrs and 9mnths in CO at $950.00 monthly to MS at $675.00 on time every time monthly pymnts.

My question is this, I have read your Tri Point review and the end result on that because I had solicitation from them in the mail with the same sales pitch you had sampled and I did, of course, read fine print to understand that the interest rate is based on “creditworthiness”, with that being said again my question to you is will you/can you advise me of a list of businesses, through your experience of researching into the different companies for fraudulent/transparent solicitation and legitimate companies, that would truly offer me the best bottom-line interest rate afforded them to afford me.

Donna

Answer:

Dear Donna,

I’m so sorry to hear about your domestic trauma. I have no words to convey just how badly that sucks.

I love your question. Thanks for asking.

This is the type of question that would be great for a clear answer. I’ve been helping people for so many years that I have come to believe lender problems come in just about two buckets.

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The first bucket is that of misleading promises, bat and switch lending, or slick sales presentations that gloss over the facts about the loan.

The second bucket is filled with well-known lenders who make a mistake and then either can’t get out of their own way to fix it or make it impossible for the average person to escalate the issue for fixing.

A third bucket is filled to the top with consumers who didn’t bother to read or understand the terms and conditions before entering a legal agreement with any lender. That’s a consumer problem, not a lender one.

Where I struggle with your question is what a “legitimate” company is. That is open to legitimacy on so many different levels.

I bet I’m safe in assuming that what you are looking for is a company who won’t scam you and leave you in a bad position.

But even that is a problematic request. For example, if a lender is willing to take an unreasonable risk and give a loan that overextends someone, is that a scam? It’s bad and will hurt the consumer but is that really a scam?

Only from what you shared it seems one of the issues that is holding you back is the loans that you have been able to get.

A secured loan and a secondary lender may not boost your credit score as much as an unsecured credit card will. Of course, any lingering negative information will hold you back as well.

One route to repair your credit is to better understand what is holding you back. One free online tool I think does a good job of showing you what is going on with your credit score is Credit Karma.

You can also get a free copy of each of your three major credit bureau reports at AnnualCreditReport.com. It is important to check all three reports because there is no one universal credit report to look at.

The best defense I can give you to getting taken over a bad loan is to help make you a really smart consumer when it comes to evaluating the offer so you don’t agree to a surprise.

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The best way to do that is by reading How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off.

Here are key points to remember to avoid getting ripped off by a scam loan.

  1. If you get an offer in the mail or hear it on the radio or see it on TV, keep in mind, that is an advertisement trying to get you to call so they can sell you their product.
  2. What the representative tells you over the phone, in-person, or in an email before you sign the lending agreement is probably excluded from any facts in the actual loan document. Meaning, what they tell you as part of the sales process may not be accurate or might be a casual misrepresentation for the salesperson to close the deal and meet their quota.
  3. The most important document is the agreement you have to sign to apply for or get the loan. That document can be overwhelming and confusing but it is really the most important thing to understand. I find that lenders do a good job of putting all the bad news in the client agreement because they know most people won’t bother to read or understand it.
  4. I would suggest you ask to read the lending agreement before you sign it. Ask any questions you might have before you sign it.

Some of the second chance lenders you mentioned can offer less attractive terms and/or interest rates. But then again, debt consolidation loan companies like Prosper or Lending Club may offer you a similar interest rate. In that case, what is probably holding you back from lower interest rates is the current state of your credit score. But I’ve shared some tips on how to improve your credit score.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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