by Don A Shepard

Created on: June 09, 2008   Last Updated: June 12, 2008

So you're thinking about getting a loan from a finance company? A finance company is simply an institution that makes loans; unlike a bank one can not keep his or her money in a finance company. There are a number of national companies that have offices in neighborhoods throughout the country. Though they do have some differences they tend to operate in the same manner. Having been employed in the industry I can tell you that these loans can serve the consumer well given the right circumstances and provided he or she is well informed before even making first contact with an office. The alternative scenario, which happens far to frequently, can leave the consumer utterly bewildered, scratching their heads and hoping against hope that they had never even made that first call or stepped into that office.

If you believe you have decent credit try your bank or credit union first, you will get a better rate. Before contacting a finance company here are a few other things to consider.
Do you have collateral with a title or deed (e.g. car, boat, house) and would you be willing to attach it to this loan? They may or may not require this in order to obtain a loan but know that this is a possibility, particularly if you have a bankruptcy on your credit report. They will not give it back to you until the loan is paid in full. In the event of a default in most states they can not only repossess the collateral but also sue for attorney and repo fees as well as the balance of the loan if the value of the collateral does not fulfill this balance. It is extremely important that even if you decided you do have collateral that you can "put up" that you do not mention this to your loan rep. If they know you are willing to put something up they will certainly take it, when it may not have been necessary. A loan with a title attached to it is considered safer by the industry and thus it looks better on the loan rep for him or her to have the attachment. The rep may try to induce you to put up the collateral in exchange for a better interest rate. Once again, this is why you will need to make the decision about collateral before contacting the office. Interest rates are likely to be higher at a finance company than a bank. Sometimes you get an abnormally high rate just because it is allowed to happen. Even if you qualify for a lower rate if you do not push the issue you will likely wind up with the maximum allowable by law. Often times the rep will try to avoid rate all together,

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