How To Protect Yourself Against Loan Scams

by Mark Smith Content Writer

The current economic situation is critical and challenging as people often considering loans to borrow money out of desperation just to help them survive. This is where scams scam performers and unscrupulous marketers prey on the public, signing them up for services they do not need and ending them with monthly debit orders adding to their woes. There is abundance of online lenders available who offer variety of loan options to choose from. Due to huge competition among almost all lenders, their interest rates and terms on loans may vary and they offer loans at competitive rates. Today, the process of getting a loan has become much easy and thus lots of people are keen on getting things fix in their life by opting for not just one but sometimes several loans together. It is sad more people are getting into debts due to these loan scams.

Loan scams are not uncommon, so it’s important to proceed with caution when applying for any loan of your choice. Find out how to protect yourself against loan scams-

•    Bogus Loan Offers

When you need a loan, you often seek out to a lender to check for the best loan option available that matches your requirements. However, this is when the scammers turns the table and approach you with bogus loan offers. The scam starts with phishing, email or phone call. If you get an offer on email with added benefits, little grammatical error, and unnecessary punctuation marks, then you must know that it can be a scam and should be immediately avoided.

•    Rushing You To Make A Quick Decision

Taking out a loan is a big decision. It is important to search, find and compare the loan carefully before proceeding. Legitimate financial institutions and well-known lenders will first focus on letting you feel comfortable with your choice and also letting you understand the terms and conditions of loans carefully. So, they will never pressurize you to make a move before you are 100% assured. If you receive a phone call for a loan and a caller is rushing you to make a quick decision, then you should consider it a danger sign.

•    Beware Of Guaranteed Approval

When before submitting your details and having less than perfect credit score, an email or phone call offering you guaranteed approval is bound to be a scam and needs to be totally avoided. Don’t get too excited with a false promise as it may not turn as good as it may sound. A trustworthy lender will always check your financial background and determine your credit worthiness before offering you a loan.

•    Asking For Free As A Fee Before Approval

When you are applying for a Cash Loans and before its approval if you are asked to pay money as fee then that’s the problem. You should never make a payment for loan applications before getting the funds. A legitimate lender would not make a request like that.

•    No Credit Checking Required

Beware of lenders who make false promises of no credit checking requirement. If your credit is poor, then lenders will not be interested in lending you money, because of huge risk involved. You must always check with the lender if he is okay with your poor credit score and if yes, then on what basis he will be approving your loan. A loan with bad credit history often comes with higher rate of interest. All well-known lenders will verify your credit history before approving you a loan.

•    Hitting With Hidden Charges Before Getting Your Funds

Legitimate lenders are always clear about cost and fees associated with your loan. If you are immediately hit with hidden charges and other fees, then you should know that something is not right. Loan application and other hidden fee charges are standard which will be deducted from the amount you borrow when your loan is approved and not before that. If you are asked to pay any fee charges before the loan approval, then do not move forward with it.

•    Never Take Panic Decisions

People often put themselves in trouble by taking panic decisions. You should always check lender’s background and other necessary details about the loan before applying. Poor decision can cost you high and put you in debt trap. So, taking a wise decision is always advisable.

•    Identify Potentially Fraudulent Websites

Just make sure a lender’s website you are visiting is secure and the URL on the site starts with “https” and you should always look for a padlock symbol in the address bar on any page when you are asked to provide personal information. If the lender’s site is not secure, then you should avoid providing your personal details and must block the website immediately.