05 Mar How to Prove Reckless Lending

Reckless lending is a complex legal issue. It involves understanding whether your lender lent you money illegally. There are many ways to decipher whether you are a victim of reckless lending, including assessing: whether you were assessed properly, if the lender knew you couldn’t pay your debt back, and whether you fully understood the contents of your loan contract. Let’s dive in to get a full picture of what reckless lending is and what it means for you.

Reckless lending often causes financial hardship because a lender grants you a loan without properly assessing your ability to fully repay it. This includes:

Lack of proper assessment

The lender has to conduct an in-depth assessment of your financial circumstances. They should understand: 

• Income: Your income sources include salary, investments, and their consistency. Lenders gauge your financial stability by assessing these things.

• Expenses: Lenders should also ask you about your spending habits. When they understand where your money goes, they can create a well-rounded understanding of whether you’ll be able to repay them. 

• Debts: People who want to loan you money must have a full picture of your debts, including rent/mortgage, credit cards, and personal loans and their associated interest rates, as well as any financial obligations you have. 

An unaffordable loan

An unaffordable loan encompasses a lender granting you an unpayable loan despite understanding grave financial circumstances. If you have bad credit or too much, lenders should never, under any circumstances, grant you a loan. 

You didn’t understand the obligations you were agreeing to

If your lender didn’t take responsibility for understanding you fully understood the terms of your loan, the risks involved, and your obligation, they have recklessly loaned you money. 

How to gather evidence that you’re a victim of reckless lending

Here’s how to prove you were recklessly lent money. 

Evaluate your case and gather evidence

Gather evidence like: 

• Your loan agreement: this document outlines your loan terms, interest rates, and other crucial obligations you agreed to. 

• Financial statements: this could include proof of income, expenses, and existing debts at the time you submitted your loan application. This could look like payslips and statements. 

• Credit report: your credit report outlines your debt, repayment, and on-time payments of debt. If you had a bad credit history at the time of your application, your lender has recklessly loaned you money. 

• Communication records: this helps the court understand what you agreed to and the circumstances the lender has placed you under. Gather records like emails, voicemails, and written communication regarding your application and repayments. 

Seek help

A legal professional can represent you in court and help you understand the legislation surrounding reckless lending. They can explain your and the lender’s rights and responsibilities regarding your debt obligations. A professional can also conduct a thorough assessment of the facts and evidence you provide and decide if you have been recklessly lent money. 

If you’d like to check your credit fo free, you can do so with Credit Boost’s free credit check.

Credit Boost is happy to help you prove you have been recklessly lent money, helping you achieve lower interest rates, and potentially, reduced payments. Get in contact with our experts now and claim back financial control.