Knowing how to spot online loan scams is the first step in protecting yourself from being victimized by this type of heinous crime. So if you see one or more of these top 3 warning signs of online scams, run and never look back!
If you’re looking for a quick solution to a financial difficulty, availing of a loan is probably the first thing that will pop into your mind. With one fell swoop, the money you will receive can address your financial difficulty – medical bills, house repairs, car repairs, or other bills you might have.
But be careful! The world is full of fraudsters who would love nothing more than to prey on your desperate need for a quick loan. These fraudsters will gladly take your money directly or by charging sky-high interest rates (paired with eye-popping hidden fees)!
Worse, they can even sell your personal information to other companies!
So what can you do to protect yourself from these online loan scams? How do you spot a scam from a legitimate loan offer?
Let’s discuss the top 3 warning signs you should watch out for.
Sign #1: They require you to pay upfront fees
The scenario usually goes like this: the lending company will grant you a considerable amount of loan but before they do, you first will have to pay “upfront fees” usually as “guarantee”.
And you think to yourself that’s reasonable. After all, they are only asking for a small percentage of the overall loan they will give you. How can this be an online loan scam?
So you pay the fees via money transfer and patiently waited for the loan you were promised. Except, your promised loan never arrives. And the money you used as an upfront fee? Gone with the with – alongside any signs of the lending company.
Sign #2: They don’t require or perform credit checks
At first glance, lending companies that don’t perform credit checks seem like they were sent by the heavens above. No matter your credit score – whether good or bad – you are qualified to avail a loan from them.
After all, who wants to go through a lengthy application process? And if you don’t have to submit any documents that’s better for you, right?
Not exactly. In fact, this sounds like another one of those online loan scams.
Because remember: lending companies make money from collecting repayments from the loans they grant to their customers. As such, they need to make sure that you are capable of paying them should they grant you a loan.
And how do they know you are capable of paying them? By performing credit checks and requiring their applicants to submit proof of their income and identities.
Sign #3: They’re pressuring you to take immediate action
Scammers will often pressure you to “grab the offer” and not “let the opportunity pass you by”. In many fancy words, they will try to convince you you’re getting a limited time offer and that you should hurry up and take it.
But availing loans is a big financial decision that requires a thoughtful consideration. Legitimate lending companies understand this, that is why they won’t pressure you into make immediate, hasty decisions regarding your finances.
So if your lending company is, in so many ways, pressuring you to accepting/signing their offer, take a hint. Their offer might be one of the many online loan scams you can find on the internet!
When you are in dire need of a quick financial solution, sometimes it is easy to rush through a decision without thinking things through. But pausing to take in the situation and keeping your eyes peeled for any red flags will help you avoid online loan scams.