Prime & Subprime Lending Lawyers
Helping Clients in Phoenix, Salt Lake City & Beyond Obtain Fair Treatment
Unless you are extremely wealthy, it is virtually impossible to purchase a house without a loan. Unfortunately, this subjects you to lenders who might take advantage of you with unethical business practices. Prime and subprime lending abuses are a form of predatory lending, and they can come with disastrous consequences for consumers. At Law Zebra, our prime and subprime lending lawyers in Arizona & Salt Lake City want to help you fight back.
The Difference between Prime & Subprime Lending
Prime lending loans are typically given to people with good credit. Borrowers are considered low-risk and are therefore given the best rates banks have to offer. Benefits include very low to no application fees, low interest rates and reward programs, and a variety of other benefits.
Not everybody has good credit. When it comes time to purchase a home, subprime lending helps prospective buyers who have low, damaged, or no credit. These loans require security deposits, application or annual fees, and come with higher interest rates.
How Prime Lenders Take Advantage of Debtors
While most banks and mortgage lending companies are honest and upfront with their clients, many others take advantage of borrowers through unethical business practices. For example, if Lender A offers a $10,000 loan with a prime rate of interest at 4 percent while Lender B offers 6 percent, most people are more likely to believe Lender A has the better deal. However, if Lender A charges a $1,000 upfront fee while Lender B charges no fees, the buyer ends up borrowing only $9,000 and will have to pay back $10,000.
Some car dealerships will actually increase the price of a car if you choose to finance. One of the biggest mistakes consumers make about prime lending is ignoring the annual percentage rate or APR. In our example earlier, Lender B’s APR will match the interest rate. Many lenders will charge huge fees and deceive borrowers with a low interest rate.
How Subprime Lenders Are Actually Predatory Loans
While these loans are easier to attain, they are far more difficult to pay back due to high interest rates and fees. The reality is interest rates and fees have become commodities. Lenders like subprime loans because they are far more profitable. In some cases, they are used by lenders to take advantage of people with bad credit.
As a consumer, you need to know what you are doing and how much it will cost you. A prime loan is generally cheaper, but if it’s not possible, a subprime loan may be necessary in order to make the purchase of a car or home a reality.
Schedule Your Free Consultation
Not every consumer is aware of the laws designed to protect them from predatory lenders. At Law Zebra, we are committed to protecting the rights of each client, and we fight vigorously to recover their financial damages. To learn more, contact our office today and discover how a consumer protection rights attorney can help.
Call (801) 820-9955 now to get started.
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Work with successful trial attorneys who are ready to protect and defend your rights as a consumer to keep you out of the lion's den when financial hardships are on the horizon.Call Today at 801-820-9955