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One's misfortune has become some organization's profit. As the poverty stricken and work class continue to delve deeper into the pits of debt, businesses such as lending institutions and debt management firms and insurance agencies are turning one's hard luck into their fortune. The recent reports of the unethical practices have gained much controversy.

Quite often, loan companies and credit counseling organizations employ high-pressure methods in targeting the indebted. For instance, Citigroup was accused of targeting low scoring and unemployed consumers. The deliberate tactics were noted as coercion to sign loans with inflated interest rates or to purchase "insurance" on loans * after the fact. One such case occurred with a woman who ended up paying for 5 types of insurance worth one thousand dollars on a $5000 personal loan.

Another notorious tactic from Commercial Credit was the routine of charging an annual interest rate (APR) over 40 percent. The drawback of personal loans is how consumers are seen as a cash cow to lending companies and other financing firms. The supply and demand of the cash deficit lures many Americans into an infinite cycle of vast debt.

Finding the Loan

Despite, the negatives aspects of personal loans, consumers in need of a loan can find the ultimate loan. Aside from banks being in business to make profit margins, it's a way of life. The alternative for beating the cycle of financial depravity commences with researching the ultimate loan. Here are a few steps to consider, before you look for a personal loan:

1. Calculate your debt
2. Compare your income to your outstanding balances
3. Create a monthly household budget (include rent/mortgage, food, utilities and other living provisions)
4. Deduct the household budget from your monthly income
5. Use the total from item number 4 to divide how much you can afford to pay on a monthly basis.
6. Review any loans or credit cards that have a high interest rate
7. Car notes should be at the top of the bill payment list
8. Remember to put hospital and any medical bills at the end of the payment heap

Personal Loan Debt Test

After reviewing your current financial status, answer the following questions to determine if you are really in need of a personal loan or you need to refine your spending behavior into a strict budget.

• On a regular basis are you cash challenged?
• Are most of your available credits below $50?
• During a crisis, are your financial resources non-existent?
• Monthly, are you only able to make minimum payments on your debt?
• After payday and beyond all loans and credit payments, is your discretionary income is very limited?
• Are all of your credit cards maxed out?

If you responded no, to most of the above questions, tightening your budget and meeting goals is vital to you digging your way out of debt. However, if you answered yes to four or more of the questions, then a personal loan is only inevitable. A monetary deficit, over extending credit cards coupled with inability to manage * financially during a dire emergency are indications that a personal loan and a change of spending behavior are critical.

At the same token, consumers require a personal should not become so bent set on obtaining approval that they lose sight of a bad loan.

Use the following checklist to identify the ultimate personal loan:

1. The lending institution does not have any complaints listed with the Better Business Bureau or any State Attorney General's offices
2. The interest rate is reasonable and affordable for repayment
3. The terms of the loan are clearly articulated and void of ambiguous language
4. The loan professional does not apply high pressured tactics to close you on the personal loan
5. The personal loan did not originate from a telemarketer
6. The debt consolidation loan should not have any pre-payment penalties
7. Secured loans that could compromise your housing property

Obviously gaining approval for the ultimate personal loan will depend on your payment history and credit score. However, if your credit score is in the mid 600s, you should qualify for an unsecured loan. Remember, that a rate of 11 percent or more should be anticipated. Nevertheless, the ultimate personal loan should not exceed more than 18 percent in interest fee charges.

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