Most people apply for personal loans for quick cash, especially in times of a medical emergency or even for other purposes like travel financing, buying a home or making a big purchase. Availing a personal loan is very easy; you can apply for a personal loan on aadhar card in no time. The online process for loans has made personal loans a popular choice among loan seekers. However, a personal loan is also one of the most common ways of getting scammed. Therefore you first need to understand the concept of a loan scam and common signs of a potential loan scam.
What are Personal Loan Scams?
As many people opt for a personal loan for financial assistance, there are a few loan scammers on the lookout for such individuals. They prey on consumers who are looking for quick solutions to their financial problems. These fraudulent businesses are typically found online, with no storefront or physical address. They’re often illegitimate business fronts that promise to lend money, but in reality, they scam people by stealing their information and money. Hence, it is essential to be alert and smart enough to avoid getting scammed. Here’s a list of warning signs to spot a personal loan scam.
The lender is not interested in the credit history.
A reputable lender will always look up the borrower’s credit history before lending a loan. A credit history check is one of the most crucial steps a lender will never fail to do. A fraudulent lender will not be much interested in your credit payment history; these lenders tend to seek high-risk borrowers who are likely to fall behind on repayments and, as a result, incur their excessively high penalty fees. However, genuine lenders offer bad credit loans to high-risk individuals too, but they look into other factors than just a credit score when determining loan eligibility. These lenders will ask for your education, employment, monthly income and other such factors to determine your creditworthiness.
The lender has no physical address.
Beware of lenders that only insist on coming to your home to discuss the loan details and do not have a proper physical address. If they have one, you can look up for their physical address online for authenticity. However, if you don’t find any sign of a physical address, consider this as a significant red flag. Avoid dealing with such lenders at all costs. Many fraudulent loan businesses would rather be untraceable to avoid any legal consequences; this makes it easy to plan their loan scams.
The lender uses odd means of communication.
Loan scammers have an odd way of communicating with their victims; they seldom cold call you or come knocking on your door offering a personal loan. Look out for such activity as there are more likely to be frauds who lure in desperate loan borrowers with deals and offers on loans. On the other hand, a reputed lender or financial institution will advertise their loan schemes on newspapers, television and have every information displayed publicly.
The lender pressurizes you for urgent applications.
When applying for a personal loan, you need to double-check everything. It is advisable to explore all your options and choose a lender that offers you the best interest rate for personal loans. Also, when filling in your loan application, you can take your time reading through the terms and conditions of the loan. It would be best if you never were pressured to make decisions regarding the loan. Reputable lenders may impose deadlines for accepting a loan, but you will likely have sufficient time to decide whether or not to accept the loan offer. Loan scammers use various tempting tactics like limited period offers to get you to make a hasty decision.
The lender doesn’t have a secure website.
A legitimate lender will have a website with a padlock symbol next to the website address wherever your personal or banking details are required. This ensures that the page is secure and no one can steal your data. The absence of padlock will more likely mean that the lender is scamming you. Carefully review the lender or banks websites to look for indicators that they’re secure. Taking such security measures will make it more difficult for hackers to steal and misuse your information. Always check through everything and approach reputed companies for your financial requirements.
Be wary of these signs that may protect you from loan scams. If you need a personal loan, do your research and compare all the lenders in the market to make sure you’re getting a loan from a trusted source. Unfortunately, scammers are everywhere, and they are willing to take advantage of people in need. It’s up to you to protect yourself by taking extra precautions when dealing with businesses for loans. You can also apply for a personal loan using a personal loan app.