Everyday, we come across these fraud personal loan schemes granting personal loans at negligible interest rates or without requirement of good credit score.This article will discuss 5 guaranteed ways to detect such loan scammers.
1. Upfront fees or collateral - Any legitimate lender may charge origination fees for services in addition to interest which is deducted from your account after loan money is deposited in your account
Load scammers charge you a fee, in the name of application fee or service charges, before deposition of money in your bank.
Even if a loan site seems legit and guarantees a loan, never pay any upfront fees. Many personal loan scammers can compel you to pay processing fees before even processing of your loan.
Pro tip - Never pay any fees to an online website. Always check the legitimacy of the lender. Do not pay any fee until the loan is 100% guaranteed with all signed documents.
2. No Credit Check loans - These loan sharks and mafias are always in search of customers with no other doors open to get a loan from.The whole personal loans profit for a lender is dependent upon credit score or high interest rates.
No legitimate lender will ever guarantee a loan without ensuring a repayment source. Any loan scheme which sounds too good to be true is always fake. Know about financial assistance for elderly.
Loan scammers can guarantee you to provide a loan without even checking your credit score. Well, this might sound an appealing offer to all folks in need but these offers will always result in robbing your bank balance. They are either gonna run away with your money or charge you with very large interest rates.
Pro tip - Beware of schemes such as “We give loans to everyone, no credit score check is required”
3. Uncertified lenders - All lenders are required to be certified by Small Business Administration or any other recognized associations as a proof of their good lending history and scam-free services.
a. This certification ensures legitimacy of a lender.
b. The applications and complaints of customers are reviewed before designating those lenders.
c. The most common fraud sign is absence of any physical address on the loan website or brochure.
Pro tip - Always check for the registration and certification of the loan lender before paying any fees or signing any document. Avoid private lenders.
4. Spam Emails - Every year, these loan sharks entrap tens of thousands of people through fraud emails. Most people casually open the links provided in those mails resulting in identity theft through corruption of your system.
These spam mails are almost 99.99% fake, consisting of schemes which are appealing enough to check out once. You can lose all your personal information, bank details, address, passwords, etc.
Instead of clicking on personal links, check the website of the lender first and consult there for further details.
Pro tip - Check for the grammatical or spelling mistakes in the e-mails as most if these are from scammers abroad or with lesser qualified personnel.
5. Loan Insurance for refund failure - A large number of personal loans are never reimbursed. So, it may sound reasonable to pay for loan insurance in refund failure.
a. Loan scammers are known to demand a prepaid insurance fee as a collateral.
b. Any unsecured personal loan will almost never need this extra insurance. A lender may ask for an application fee, credit score, but only after transferring the loan to your bank account.
Pro tip - Look out for the lenders pressuring you to get a loan insurance or any other fraud service perks.
Last pro tip:
It is said rightly that when it comes to financial matters, You can never be careful enough. Pay attention to these personal loan frauds and overly optimistic fraud schemes. Never open any link from an unidentified source. Stay cautious in sharing your bank details to certified lenders too.