When you are in need of funds and don’t want to go physically to the bank, alternative lending companies come to your aid. These companies can be helpful in a tweak, but you need to watch out for fake or fraudulent companies handing out loans like candies to lure innocent customers. These loan frauds can steal personal information and use it for any purpose. One must be wary of the warning signs that show that the lender might be dubious. Here are some of these signs:
E-mails that ask you to give your personal details and have grammatical and/or punctuation errors.
If you’re asked to transfer substantial money prior to getting your loan
Interest rates are way too low compared to any other legitimate lender
You are offered a fairly long free tenure before starting repayments
Lender’s website is not secured (“https” does not appear in green)
E-mail prompting you to act instantly
Tips to Avoid Loan Scams
1. Do a thorough research on lender(s)
While you search for lenders in the market, there are many fraudulent ones, so go in with extreme cynicism. Even when you have shortlisted some of the lenders, make a thorough check. Call the lender to make sure that he really is, what he claims to be. Also, get the physical address and search for reviews online.
2. Do not give any personal information over the phone
Look out for the companies that ask for personal information upfront on telephone. Such companies have higher chances of being a scam. A valid lender would be sensitive and understand a customer’s hesitance and won’t pressurize you for any such information over any medium. Never give your personal details to anyone over any medium, unless you are absolutely sure that your information would be in safe hands.
3. Keep all the defending weapons in our PC
Always have an anti-virus, anti-malware, and spam protection application in your mobile and computer to protect yourself from phishing attacks of online scammers. These application will altogether block all the e-mails and notifications from all possible phishers not allowing you to part with sensitive and personal information.
4. Avoid sales people that pressurize you
Legitimate lenders would want to know a bit about you before getting into an agreement. But, they will never pressurize the customers to release such information quickly. On the other hand, fraudsters will force you to close the deal on the very first day; he might come up with application papers on the very first meeting and will always try to sell you something rather than help you answer your questions.
5. Beware of unrealistic guarantees
If someone offers you to “Build Castles in the air”, beware of such people, avoid entering into any agreement with them and say “See you later, Alligator” because more often than not such people are scammers and will relieve you of your money.
6. Ensure that the loan agreement is complete
Have a sharp eye and ensure that the loan agreement is complete in all the aspects. Checkout for documents containing information like: loan amount, repayment schedule, annual percentage rate (APR) – whether it is fixed or floating, default provisions, and any other special conditions and clauses.
7. Read the agreement at least twice before signing
Don’t trust anyone, an inch and have faith in your own self. Check the loan agreement thoroughly and ask for clarifications on all the doubts that you have. It is also advisable to make a legal professional have a look at the agreement and seek his/her opinion. Just like in mutual funds, read all the documents carefully before signing
8. Keep a track of all the repayments made and other things
Check your bank statements, credit card statements, and loan statements on a consistent basis to make sure that there are no unapproved or unjustified deductions. If there are any, seek a prudent clarification on the same and if still you are not satisfied, report such issue to appropriate authorities.
A Final Word…
To best deal with such loan scams, know them, avoid them, and report them. If you have become a victim of a scam, don’t be hesitant to report it because this might bring out a new problem that can be avoided by others. So, don’t be afraid and “lend a hand” to others.