How to Avoid Lending Scams
When you are offered a loan deal with unbelievably low or zero interest rate or without credit check and it seems too good to be true, be aware, it might be a scam. If a lender is legitimate, they will never send you emails inviting you to borrow a loan with favorable terms. Such scammers will usually provide you quick and easy loan approval and application process, bad credit should not be an issue, offer low interest rates and also charge you a fee upfront. Such loan offers may be exactly what you are in need to hold you over when you are strapped for cash, especially if you have a low credit score. Be careful as you are more likely to fall into the trap of such lending scams when you are more desperate for cash. There are several lending scams that you should be aware of. Besides, there are several tips as well to avoid any sort of lending scams.
Advance Fee Loans
You find a compelling advertisement which guarantees to offer you loan approval regardless of whether you have good or bad credit score. As a part of the loan application you submit your loan request along with all the information and supporting documents. In no time you will get a response informing you that your loan request has been approved, but before the loan is released you are asked to pay a small insurance fee, processing charges and three months advance payment immediately. If you are in dire need for cash, you will be excited to hear about your loan approval. Trying to get people pay advance fee during loan approval is nothing but scam. You will pay the advance fee asked, but the promised amount will never arrive. Instead, try to find a legitimate broker who discloses their fees clearly and does not charge an advance fee.
Loan Phishing Scams
Whenever scammers impersonate a business so that they can trick you into providing your personal information, it is known as phishing. At times, such scams are done by impersonating the websites of reputed financial institutions or build a legitimate looking website to offer you a loan. The sole goal is to collect your personal details. Through phishing scammers can gets your bank account number, password, credit card details and other sensitive information. They may also try to hijack your assets or steal your identity to open a credit account in your name.
Avoid Lender Who Isn’t Interested In Your Credit History
When a lender is least bothered about your credit score ahead of offering you a loan you need to be careful. You can find lenders offering loans and credit cards for different purposes. The first thing that a legitimate lender will be concerned about before accepting your application is your credit history. So, be aware of those who don’t care about your credit record and have ads that say, ‘Bad credit? No issue’, ‘We don’t bother about your past’ or ‘Everyone deserve a loan’ and so on.
Avoid Lender Who Pressurize You To Act Immediately
Any lender who is asking you to send application fee fast or give away personal information before you have got any paperwork done, should be avoided. Such loan scammers will put pressure on you to act quickly. Instead of that, insist on receiving all the paperwork before deciding whether you should apply for the loan.
Be aware of lenders who ask you to make a payment on your loan by wiring cash directly to an individual. It is an obvious way to steal your cash. Such lending scammers will use individuals or companies that will make it difficult for you trace the wired money.
No matter what loan you are applying for, always be careful about lender who is no connection with an established financial institution. Always ask for the physical address of the lender, collect company’s phone number and call to check. Be aware if the lender is reluctant to provide location information and not registered. Last but not least, do not get desperate when you are in need of cash fast and you have bad credit. Do your researches and educate yourself about lending scams so that you can find a legitimate and reputable lender.