Signs of a personal loan scam

Signs of a personal loan scam

Online lenders come in handy when you have a poor credit score or you do not like the terms offered to you by physical banks. Online lenders have less dense terms and conditions, which makes it convenient for most people. While online loans are very beneficial, they come at a risky cost. Taking a loan online means you risk running into multiple scammers pausing as lenders

Here are some common signs of a personal loan scam

There is no credit check requires

Legitimate lenders should check your credit to determine your ability to repay the loan. High credit score mean that you can repay the debts in full on time, a lender who is not interested in seeing the credit score is most likely a scammer. They do not care about your creditworthiness because they are only after your personal information.

A lender who is not registered in your state

All states require a lender to register and have a license. If the lender does not have a license to operate in your state, you should avoid responding to their lending enquiries. They are just fraudulent people looking for an opportunity to make money out of unsuspecting clients

The loan offer is incomplete

The landing act requires all loan lenders to provide terms of the loan that include the final cost of getting the loan. Before signing any documents, you should check out for complete payment details which include the principal amount plus interest. Lack of details should tell you that the website is operated by a scammer.

There is no physical address

Scammers will not provide any physical address simply because they do not want to deal with the clients face to face and are most likely operating an illegal business. when you cannot get in touch with the lender, there is no way to settle and pursue a dispute with them.

The loan requires an upfront payment

Lenders who demand insurance, processing and origination fees before they can approve your loan applications are totally fraudsters. A lender should never ask for any form of payment before they can process your application.  Once you are presented with this kind of information, you should report the website and avoid giving out any of your details

Approval is guaranteed before you even sign up to the website

Guaranteed loans simply do not exist. A lender should first check on your financial status, which includes your income and credit card before they can consider giving your any type of loan. Scammers will lure you in by promising a guaranteed approval so they can collect your information and some upfront fees.

Lenders asks for gift card payment

Paying the lender with a gift cash is similar to making payments with hard cash once you make all the payments and the card is used it is close to impossible to get it back or even trace it. Legitimate lenders should not ask you to make payments with gift cards.

A legitimate lender is easy to contact, runs a secure websites, runs a credit card check and has clear loan terms. You can check their reviews and ratings online to make sure you are working with the right group of people.

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