Case study #4: bad credit cash loans
This case study about bad credit cash loans is about a technique that many people who are in debt use. The technique shown below is used by many unsuspecting people who think that they will be able to cleverly make use of certain loans and situations, except that they don't know that the loan companies are already one step ahead of them, and the situation that they have gotten themselves into will lead to their financial destruction.
If you have bad credit, chances are that the banks and legal financial institutes are not going to approve your bad credit cash loans in fear that you are not financially stable to settle the debt from the loan. So why do those loan sharks create bad credit cash loans and poor credit cash loans? To target desperate customers who are in urgent need of instant cash. The problem though, is that many people try to take advantage of this situation by trying to cover one loan for the other.
People tend to take up loans that they sometimes can't afford to maintain or settle. By failing to make their monthly payments, many people have their debts increased and sometimes gets into violent situations. Here is the mistake that many people make. Because they can't settle their initial debt or make the monthly payment, they go to another loan company and apply for bad credit cash loans. Because they already have an outstanding amount at another loan company, they are left with no choice but to take up poor credit cash loans in the hope that the loan company he is trying to apply a new loan for, will not find out that he has a previous unsettled loan somewhere else.
However, unknown to the person applying for the loan, most loan companies have an inter-connected network and they share information about their loan rates and their customers who have settled their debts as well as those that have yet to settle their debts. if they find out that you still have an outstanding loan, they will consider a few things before they approve your loan.
The first thing they consider is the amount. If the amount to be loaned is large, they might refuse your application or they will only approve the loan for half of its value or less, depending on the situations. Another factor they consider is the payment history. If the person has a good payment history for his previous payments, they are highly like to approve it. If not, they might refuse the loan or charge in insanely high amount of interest rate.
But in almost every cases, the interest rates for the new loan they are applying for, will be higher than the first loan. Although only slightly higher, it achieves its main purpose from the loan companies. There have been many cases of people taking up multiple loans from multiple loan companies to cover their previous loans. For example, person A borrows a loan from company 2 to pay for his debt at company 1. Person A will then borrow another loan from company 3 to pay for his loan at company 2. And the cycle continues. Each time person A fails to come up with the amount needed, he will take up a new loan from another company to settle his previous loan.
There are many people who do this without realizing the situation they are getting themselves in. As they continue taking up new bad credit cash loans, their initial debt only increases and so does their monthly payment and burden. That is the reason those loan companies will charge them a slightly higher interest rate. So that people who try to take advantage of the situation will actually have it backfire on them in the long run. That is the reason why most loan companies share their customer's information among each other, and created those poor credit cash loans. While many people think that they bad credit cash loans will mean that those loan companies will not check their loan and debt background, the truth is that those companies do background studies on their customers to find ways of increasing that customer's debt towards them.
To better show you how this works and the devastating result it has, please read the next page which will show a case study of a real life situation in which this method was used by an unsuspecting lender.
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