7 Things you should know before taking a World Finance personal loan

World Finance operates over a thousand branches in these 16 states. They offer short-term installment loans to people who might struggle to get approved by a bank or credit union. I want to tell you seven things you should know about World Finance before you take one of their loans. The first thing you should know is that World Finance is a bit cagey about what they charge for their loans. World Finance does not disclose on their website what APRs they charge on their loans. Partly they hide behind the fact that each state may be different. They only want to tell you what the loan is going to cost you after you have a loan agreement in hand and a store associate is there to encourage you to take the loan. But after digging around I discovered that more than half of their loans have an APR above 36 percent. Their average APR is 46 percent. Keep in mind that new customers are far more likely to have higher than average APRs. In fact based on what I'm seeing I'm guessing that a new customer probably gets an APR around 90 percent. These APRs should include account maintenance and origination fees. Any fee you cannot avoid should be disclosed in the APR. If you feel you need to sign up for insurance that cost is not going to be part of the APR and would make the loan even more expensive. The second thing you should know is that World Finance is going to try to sell you insurance. One of the things that a World Finance employee will do is to try to convince you to buy insurance on your loan. They offer an extensive list of insurance policies. The problem is that there is no information on any of these products on their website. You are likely to first learn about them when someone is telling you why you really really need it. But here's the thing normal insurance companies pay out between 60 and 80 percent of their premium revenue on claims. World Finance spends only 18 percent. That tells me that either the insurance is way overpriced or it is insuring something that is unlikely to ever happen. The third thing you need to know is that you won't know what your loan should look like until after you get the loan agreement. World Finance lends under state laws. That means that lending terms might be different for every state. That's why it's so difficult to know what a World Finance loan would look like for you before you apply. They don't disclose state-by-state differences. You will only know what they offer you when the loan agreement comes after you've applied and after you are accepted. So you have to be particularly vigilant. They rely on the fact that you are tantalizingly close to the money you need to just sign the agreement. So I would recommend that you apply to a couple of places before you apply to the World Finance. I recommend that you have at least two or three approvals in hand before you make a decision on which company to go with. This will ensure you're getting the best deal you can. Remember every lender has different criteria for deciding who to lend to. At the UConn project you can check your rate with up to 40 lenders all at once. And checking won't negatively affect your credit score. Apply to any one of the lenders and we will check your rate with all the others in our network. It's a great way to know who will give you the best deal. The fourth thing you should know is to pay particular attention to the kind of fees that they're going to charge you. World Finance says that their loans come with one fixed rate, no hidden fees, and completely transparent pricing. However, their filings with the government talk about origination fees, account maintenance fees, monthly account handling fees, as well as other charges permitted by the relevant state laws. So if you get an offer from World Finance you may need to pay close attention to your terms and conditions to make sure you understand all of the fees that might be associated with your loan offer. The fifth thing you need to know is how World Finance is going to decide whether to lend you money. While World Finance does not say exactly what you need to do in order to be approved for one of their installment loans, I can say exactly what they will look like. They will look at data in your credit report, but I don't think they will look at your credit score. They will look at your payment history, your outstanding debt, the length of your credit history, the number of hard inquiries you've had recently, and your credit mix. In general though, I don't think it's terribly hard to be approved for a loan with World Finance. I believe that people with damaged, bad, or poor credit scores are often approved. The sixth thing you need to know is that World Finance will call you if you're late on a payment. Local branch employees will call you if you're late even a day on your payments. They won't just call once either. They will call and follow up on any payment due and remain in close contact with letters and phone calls until you make the payment. They will use whatever numbers you give them too, so they are likely to try to reach you at work if they can't get a hold of you on a personal phone line. The seventh thing you need to know is that it might be hard to pay off a World Finance loan. When we take out a personal loan, we never think we're going to stay in debt for years. We hope to pay off the debt and move on with our lives. The longest term World Finance offers is 46 months or just under four years, yet 57% of all of their current borrowers have been using World Finance for over five years. World Finance might be like the Roach Motel. You can check in, but you can't check out. In fact, 71% of all World Finance loan originations are to people just refinancing an existing World Finance loan. They are likely to push you to refinance when you hit a financial snag, but remember that refinancing restarts the clock all over again on the amount that you owe. World Finance might be the lowest cost loan you can qualify for, or it might not. They are not terribly transparent. They will try to get you to take the loan before you have a chance to check with anyone else. Resist that temptation. Shop around. If you found this video useful, please like this video and subscribe to our channel. Thanks for watching.