10 Ways to Identify Loan Scams and How to Avoid Them

On your quest for a personal loan, you need to be careful not to enter the hands of loan Scams. On this post, you will see 10 Ways to Identify Loan Scams. You will also see their warning signs so as not to fall victim to them.

It is no doubt that daily, thousands of people request for loan either for business purpose of for personal use. Either of which, it is important you take note of these 10 ways to identify loan scams.

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10 Ways to Identify Loan Scams

Most of these platforms portrait juicy offers ranging from no or lower interest rate to larger sum of loan offer. When ones you see any of these signs, it will be of your interest to avoid such platform as it will do you no good.

No Interest in Your Credit History

Real loan lenders will have to go through your credit history to be sure your credit is worthy of the amount you are requesting for. Even when they come saying “No Credit? Bad Credit? No Problem!” avoid it else you will be scammed.

Phone Offer

It is illegal to make loan offers over the phone. Any offer must be put in writing. It must prominently mention all associated fees.

Upfront Fees

No legitimate lender will ask you to pay an upfront fee. Come to think of it, someone is in need of N100,000 and a lender is asking such a person to make an upfront or registration fee of N10,000 in other to access the loan. That is a real scam and you should stay away from such offer. Legitimate lenders will disclose all their fees before you go ahead with your request and some times part of the loan not bringing a fee on the application process.

Wire Transfers

If the lender demands you to wire money for fees, that is another red flag. Never wire or transfer money to an individual. Always ask for the lender’s physical address. Then reach out to the Attorney General or Financial Regulations office in the state to verify if it is a legal business or a loan scam.

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Copycat Name

In an attempt to appear legitimate, unscrupulous loan scams will come up with a business name or website that looks genuine. It’s always advisable to check with the Better Business Bureau to authenticate the address and phone number.

Personal Information

Never give out any important personal information such as bank account number, date of birth, phone number to any loan platform unless you are sure of the authenticity of such platform. Loan scammers can use your personal information for identity theft or steal from your bank account.

State Registration

As stated earlier, before going ahead with any loan application, you need to concult your state Attorney General’s office Financial Regulation or Department of Banking to to be sure the lenders and loan brokers are registered in your state where they do business. That won’t guarantee the perfect experience with the lender, but it can help spot a loan scam.

Customer Service

Reputable lenders have phone numbers you can call. If you are not comfortable with customer service, you shouldn’t give the company your business. Don’t settle for the phone robots, either. You should be able to speak with a person.

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Online reviews are now influential. They can also help you pick a reputable lender. You can Google the outfit or person’s name, while you check Facebook, the Better Business Bureau or other sites that specialize in lending reviews. If there are bad reviews, take note. If there’s consistency across several locations, with everyone forming an unfavourable impression, that is a warning.

Red Flags

There are several things that should prompt immediate concern. Be suspicious of email messages contain errors in spelling, capitalization, punctuation and/or grammar. That’s a lack of professionalism. Be wary if you get a free period (like a year with no payments) before the loan must be repaid. Definitely beware if the lender says they don’t use credit checks and will lend money regardless of past financial problems.

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This post is not trying to scare you away from getting loans to solve urgent needs. The aim to make you to be watchful when accessing these loans due to the high rate of scam in the country today.

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