Responsible non-traditional lenders, such as Blue Trust Loans, provide suggestions on avoiding loans. Acknowledgment that interests are high and penalties for non-payment are stiff is the first point that is stressed to potential clients. It is also mentioned that installment loans should only be considered as a last resort in the event if an emergency.
The benefits of opening a savings account are explored on lender websites. Saving just a little each pay check can add up quickly as a resource for covering unexpected events. Car problems, a medical expense, or having a broken window repaired are easier to pay for when people plan ahead.
Those who are behind on utility payments are advised to work with the appropriate company to make payment arrangements. Most companies are willing to waive late payment fees if a payment plan is followed as agreed. An installment loan to prevent the electricity from being turned off will only add to the overall debt. The late fees of utility companies are more reasonable than late fees for late installment loan payments.
Why This Information Is Provided?
It may seem counter-productive for lenders to make suggestions on how to avoid utilizing their services, but it is to their advantage as well. The purpose of non-traditional loans is to provide fast cash to people who will not qualify for a traditional loan. There is a high level of risk in that business, which accounts for the high interest rates. Clients who have tried other avenues are fully aware of the importance of paying back an installment loan on time.
They realize that the money will not come from other sources, so they are more likely to borrow only what is needed. Paying the loan in full is imperative in case that avenue is needed in the future. That realization lowers the risks taken by the lender. The lenders are doing business with people who know the loan is a last resort and are sure about signing the agreement.
The borrower gets the money if minimum requirements are met. The lender reduces the risks of having the loan defaulted because borrowers rely on them as a resource. It is a win-win situation when the lender provides crucial information and the borrower understands the complexity of the situation.