One of the worst types of lenders that you can come across when applying for a loan of any kind are those who lie about the terms and conditions of the loan itself. There is a reason that so many companies have such horrible customer experiences. This is usually the case with pay day loan companies, but despite the loan or the lender, there always seems to be a story with specific lenders.
A client from Illinois had taken a personal loan to fund his newly created real estate business, which he decided to follow alone. In order to qualify for his loan, he had to take a personal loan against the two properties he had already owned. While the rates were too good to be true with a long repayment date, there was no reason for the home owner to be conscious about how good the terms seemed to be.
Now, whether you blame the customer for his lack of foresight or scrutiny against the contract that he was signing, this is still an unreasonable clause within the contract. The contract had a clause which started that within the first late repayment, if the monthly repayment isn’t made within 3 working days, the client would lose all assets and legally seized to the lender.
The issue isn’t the clause itself. It’s a fair clause that many lenders use to ensure that they can recoup some of the losses they may potentially make. But usually, this clause is reserved for customers who default or fail to make a payment 3 months in a row. Considering this was the clients first late repayment and there was a lack of communication regarding this clause before they moved forward with the seizure of assets, it was by far a smash and grab tactic by the lender.
They lost in court.