Shield yourself from predatory lending by following these expert tips – USA TODAY

Illustration by Tracie Keeton / USA TODAY; and Getty Images
What if your car needed repairs done, and you didn’t have the money to cover the cost?
You’re at the mechanic shop when you get the news, mind racing, wondering where to cut your spending — food, rent, health insurance — to free up cash for the unexpected bill. It’s not an easy decision.
But then an employee shows you how to get a loan so fast that you’re approved in minutes and you’ll be able to go home with your car.
Sounds like a great deal, right? But there’s a catch – that new loan you’ve signed up for, if it isn’t paid off in a set amount of time, has a triple-digit interest rate.
And if you’re not careful to read through the terms and conditions, you might miss it completely. This happened to a few of the people USA TODAY interviewed who were desperate to get on the other side of their hardship and missed that very big detail.
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Rhiannon Stanger, 31, of Pompano Beach, Florida, remembers how easy it was for her to get a $2,700 loan at the pet store when her kids fell in love with a puppy.
Stanger said she signed up on a tablet an employee handed her, and she was approved immediately. But, she didn’t realize the loan came with a whopping 139% interest rate. As a single mother of three daughters and a full-time student who makes $30,000 a year, she had to stop payments on the loan, because she couldn’t afford them.
James Hollis, 57, from Tucson, Arizona, had to get his car’s transmission fixed, and took out a couple of car title loans that came with interest rates of 155% and 202%. He too stopped making payments, because he struggled to pay for gas, food and housing with money from Social Security disability.
Luckily, Hollis had his debt paid off by a good Samaritan.
Here at USA TODAY, we’ve written a series of stories about consumers getting trapped into short-term high-interest loans. These loans exist for people who need to get out of a bind fast and need money to complete their purchase. But by not understanding the terms and conditions of the debt, consumers end up paying much more than they bargained for in monthly costs and have seen their credit score drop.
But what can you do to prepare yourself ahead of time when an unexpected expense rises?
The National Foundation for Credit Counseling offers consumers advice on how to best manage money when they do fall into financial difficulty and need help the most.
Barry Coleman, vice president of program management and education at NFCC, said they assist consumers in how they can trim expenses to help them keep more money in their pocket.
Coleman said borrowing should not be the first reaction to the situation. He has the following tips:
In addition to these tips, there are signs consumers can look out for before falling into a predatory loan:
Coleman has one overriding piece of advice that he recommends for consumers: Plan.
Identify what is a want and what’s a need, and if you can’t afford the want, develop a plan and save for it, even if it means putting away $10 a month.
“Don’t act on impulse. Plan and develop a strategy that can help you to reach whatever that financial goal is,” he said.
Amritpal Kaur Sandhu-Longoria is the consumer watchdog on USA TODAY’s investigations team. Send her your tips at [email protected], @AmritpalKSL, or on Signal at (434) 473-4073.
‘Rent-a-bank’ loans on the rise:Consumer watchdogs raise alarms as more consumers rely on high-interest borrowing.
The high price of desperation:How a $3,000 repair ballooned into a $14,000 debt
Good samaritan pays off loan: An Arizona man’s debt is lifted by a stranger.

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