Why Are Lenders Requesting Collateral Payments Before Releasing Funds?
My credit is not as good as it use to be. I was contacted by two lenders who "guaranteed" my loan. One is asking for 3K & 1850 upfront before funds are released. Is this a common practice for less than perfect credit lenders to request? I sense it is not legal and researching it further by contacting local chamber of commerce and BBB. I Just wanted to blurt it out for an answer.
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It's possible that the debt owed is higher than the value of the collateral. They may be protecting their interest in case you default and they have to seize the property. By making payments, the balance owed will be less and they will lose less money once the collateral is sold.
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