Personal Loans

Biggest Warning Signs of a Personal Loan Scam

It is important that you are able to identify some of the warning signs of a personal loan scam so you don’t become a victim yourself. Each year many people are taken advantage of by dishonest so-called lenders, so you will need to get this information before filling out any applications. If you are in need of a personal loan for any reason, you will find that this information can help you avoid a horrible situation. Becoming a victim of a loan scam could cost you a lot, which is why you will want to educate yourself.

Ignoring Your Payment History

Any legitimate lender will always notify you of their intent to pull a copy of your credit report when you apply for a personal loan. You should think twice about trusting any lender that completely ignores your payment history, because it probably means they aren’t to be trusted. Each lender has different standards for applicants’ credit, but almost all of them at least run a basic credit check. It is possible to get a loan with bad credit, but you’ll need to watch out for lenders that don’t care about your credit history at all.

The Lender Doesn’t Have the Proper Credentials

You will always want to make sure that the lenders you apply with for a personal loan have the necessary licensure or certifications so that you don’t unwittingly fall into a scam. It is crucial that you take the time to look into the credentials of each lender so that you can choose one that is completely legitimate. Make sure the lender you borrow from is licensed before you sign a contract with them, because otherwise you’ll likely end up regretting it at some point.

They Require Payment for Fees Upfront

No reputable lender will ever require you to use a prepaid debit card to get the loan you need. A lot of the “lenders” that run these scams require applicants to pay an upfront fee with a prepaid debit card, and it’s a clear sign that something is not right. You will never need to pay any fees upfront, so keep that in mind when you are looking for the right lender. There are numerous fees associated with most loans, but they are paid over time and starting once you get approved and not before.

Lender’s Site isn’t Secure

Always look for “https” before the URL of the lender’s website so you know that it is completely secure. If you do not see this, you will not want to use the website at all. A vast majority of lenders have secure websites, but this is still something that you will need to be aware of. A lot of people have had their identities stolen because they used websites that were not completely secure.

The Lender Doesn’t have a Physical Address

Even most lenders that are based online have a physical address of some kind that you can look up. If a certain lender doesn’t seem to have any physical address, you should seriously think twice about getting a loan from them. Any lender that doesn’t have an address is most likely not legitimate. It is standard for pretty much all reputable businesses to have a physical address on record, even if they offer their services entirely online. Take the time to find out if each lender you look into has an address before you choose one in particular.

You Are Asked to Submit Collateral

Unless you are taking out a secured loan, you should never expect any lender to ask you to put down collateral. This is a common sign that someone is trying to scam you, and it’s something that quite a few people fall for even today. You should never turn over any property to a lender that doesn’t seem legitimate for a non-secured loan. The “lender” is most likely looking to take your property from you permanently without giving you a loan at all.

Spam Emails

You should never apply with a lender who randomly sends you spam emails, because they are most likely not legitimate. There are a lot of email loan scams, so you will need to make sure that you do not fall victim to any of them. It’s important that you never click any links or open attachments in emails from anyone you don’t know, because it could result in your information being stolen. This is a fairly common scam that a lot of people are still running, so you’ll need to be aware of it.

Lots of Grammar and Spelling Errors

One sure sign that a lender isn’t legitimate is if the correspondence they send you is riddled with spelling and grammar errors. Make sure that you keep an eye out for this so that you can tell when a lender isn’t for real right away. If a certain lender doesn’t seem very professional, it’s probably because they aren’t. A lot of the people who run these scams do not speak English as a first language, hence all of the grammatical errors.

Finding Legitimate Lenders

There are a number of things that you can do to find a legitimate lender to borrow from. The internet will be able to help in your search for a reputable lender, so you’ll need to use it to your advantage as much as possible. One of the best ways to find a good lender is to read reviews that people have written for some of them online.

Those who take an adequate amount of time to find the right lender will be very happy they did. Look for lenders that are well-established and have a positive overall reputation online so you know you can trust them. Don’t be afraid to send an email to some of the lenders you come across so you can get to know them a bit better. You should also browse through these lenders’ websites, as they will be able to tell you a decent amount about each one.