Nobody wants to think that they could be the victim of a scam, however, thieves and fraudsters target millions of people each year. One of the big ways that scammers steal money from their victims is through loan scams, which is why shopping around for a loan can be risky if you don’t know what you’re doing.
The reality is that they don’t teach us how to smartly shop for a loan in school. This leaves many of us not knowing where to turn when we need to borrow money. It’s so important to spend time researching lenders before committing to a loan. Some so-called lenders are operating using all-out scams that steal money from their victims. Other lenders use predatory methods to try to collect high interest rates and penalty fees the second you fall behind on a payment. Take a look at these five indicators that a loan offer is a scam before you fall into one of these carefully laid traps. What’s on this list could help you to avoid risky lenders, keep your credit score intact, and stay out of debt.
The Loan Offer is Expiring Soon
You should be skeptical if a lender is telling you to act now because you are being presented with an urgent offer that will expire soon. The reality is that a legitimate lending institution never uses pressure-driven gimmicks. Any lender that is trying to get you to act quickly is probably trying to pressure you into agreeing to a bad offer before you have time to do your research.
They Offer Guaranteed Approval
No loan is ever guaranteed. At the very least, lender’s will check your credit or employment history to ensure that you will be able to pay them back. If lenders are offering automatic loans without the need to first check that you are a reliable borrower, then it is because they don’t intend on actually giving you money. Scammers lure you in with guaranteed approval so they can collect fraudulent upfront fees or your personal information to sell.
No Mention of Your Credit Report or Payment History
The process of applying for a loan shouldn’t be scary. However, it should require you to provide some details regarding your financial history. After all, lenders have to protect their own interests. A reputable lender should ask to take a look at your credit report, employment history, or other background information that can better establish you as a reliable borrower. Lenders who are not reputable won’t bother to run a report because they are relying on you to fall behind on payments. These predatory lenders tend to seek out high-risk borrowers because they want to impose excessive fees and penalties.
They Don’t Have a Physical Address
Make sure to do a quick Google search for any lender that you are thinking about working with. Not being able to provide a physical business address is a red flag because they are not easily traceable in the case of a scam. Loan scammers are masters at slinking back into the shadows where you can’t track them once a scam has been finished.
A Lender Provides Incomplete Paperwork
A final loan offer should be pristine and complete. Do not sign anything that lacks the complete terms of a loan. The Truth in Lending Act requires all lenders to include all final details and costs regarding a loan. You should also be on alert for any fuzzy wording, grammatical errors or spelling errors when giving a loan offer one last look. These can be telltale signs that a document hasn’t actually been looked at by a qualified legal professional.
Loans You Can Feel Good About
There’s no need to feel defeated just because scammers exist out there. Through good research, legitimate and reliable loan providers can equally be found. All of their loan and business details should be easily accessible on their website in addition to security when submitting your personal information to their online application. Real loan providers also often offer great customer support who will go the extra mile to help you understand the terms of a loan. When it comes to looking for a reliable loan provider, remember these five signs to avoid getting scammed.