Home equity loan scams can often lead to foreclosure. Though many states now have anti-predatory lending laws in effect to protect home equity borrowers, South Dakota has no such law. Surprisingly, the state's foreclosure rate is one of the lowest in the nation. The only answer is that there must be a lot of smart borrowers in South Dakota!

If you want to be one of them, you will need to make sure you know your rights when applying for a South Dakota home equity loan. Here are three ways to make sure you're not getting scammed:

Get a Good Faith Estimate

By Law, lenders are required to send you with a Good Faith Estimate within three days of receiving your South Dakota home equity loan application. This written estimate will include detailed information about the loan charges that you will be expected to pay. Look it over carefully and make sure that these estimates match your loan contract before signing. If you see any suspicious charges, you will want to question your lender immediately.

Avoid Predatory Lenders

Predatory lenders who deal in South Dakota home equity loans will often try to pressure you into borrowing more money than you actually need. They also usually ask you to falsify information on your loan application. If your lender does either of these two things, you may want to consider getting a new lender. The current one probably does not have your best interests at heart.

Know the Law

If you think you have been scammed, do something about it. Under federal law, you have the right to cancel your home equity loan within three days of obtaining it. You must do it in writing and you must return the money. However, there is no penalty and you don't have to have a reason for cancellation.

Visit South Dakota Lending Center to see our Top 3 Home Equity Lenders in South Dakota, whether you are looking for home purchase, refinance or a home equity loan.

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