5 Warning Signs of a Personal Loan Scam
Have you ever been in a tight spot and you need more money than what you have?
Do you urgently need money, but your pay day is still days away?
There are certain times in our life when we consider getting a personal loan to finance our wants or needs. A quick Google search will lead you to thousands of lending companies promising easier payment terms, or a big loan amount promising low fees but with lots of hidden charges.
You might even encounter a too-good-to-be-true lending company; they assure you they’ll lend you a huge amount of money. The one you need for your child’s education. A big amount enough to start over again. Enough money just to get by without waiting for support. You become enthusiastic; you share your information and they promise they’ll get back in a few days.
And poof! They’re gone. After a few days or weeks, you’ll receive notice that you’re further down the dumps, as “you” allegedly borrowed money you didn’t even applied for. This is just one of the common cases of identity theft. Some will misuse your information to take out loans for themselves.
How can you avoid these scammers who would just rip you off and put you into more financial stress? Watch out for these top warning signs of a personal loan scam!
Watch out for No Credit Check “perks”. Isn’t it too convenient to find a lender that won’t check your credit simply because they ‘understand’ the position you’re in? Isn’t funny that some lenders ‘claim’ that they have a software that can estimate your credit history?
Online loan companies like Personal Loans Now in Australia allows you to apply online for a personal loan, but they still undergo a process where they check your current standing and more. Once they finish verifying your documents, they will still screen you for more information. A definite date will be set to let you know if you can get a loan or not.
Scammers use survey forms that gather your personal information and they’ll leave you hanging with more debts down the line.
Asking for Upfront Fees or Collaterals. This is the oldest trick in the book. Scam companies will ask you to wire them money so they can process the loan. Nowadays, their modus operandi involve obtaining your debit card information; they will promise to only “check” your debit card if there’s money in your account “for security reasons”.
Next time you check, your debit account has already been drained. Be careful of these different attempts to get upfront fees from you.
Unregistered lenders. Operating outside the country or online does not exempt any lender from getting registered. A quick search online or call to the State Attorney General’s Office will help you determine if you’re talking to a legitimate lending company. Borrowing money from illegal lenders can put you into deep trouble.
Non-existent offices. Again, you are prone to identity theft if you’re not careful of where you apply online. Even online lending companies have their own headquarters somewhere. Look for their contact page, and do a little research or drive to their location to inquire. Watch out for those with PO boxes as addresses; chances are, they aren’t legitimate.
Emails offering personal loans. It’s ridiculous how people still believe these exclusive offers for a low, low, low interest rate. These emails are in the Spam folder for a reason. If there were emails that slipped past the Spam filter, watch out for those offering commissions or any additional perks. Check for a professional email signature, and avoid clicking links or downloading attachments from that email.
If you have fallen for these tricks, call your local police, and file a report. Online scams might be difficult to trace back and retrieve whatever you lost, but reporting it will help the public to become aware of scams like these.
Save your family’s well-earned money and contact a legitimate lending company for your personal loan needs. Do you have any experience with scammers, especially with online lenders? Share your story via the comments!