Whenever we are about to apply for a loan, it’s up to us to identify possible scams. It is not a secret to anyone that there are people willing to take advantage of a bad economic situation to get profit.
Therefore, knowing the red flags that might appear with false lenders is key to avoiding scammers when looking for loans in the US.
We know that loans are a magnificent way to help us improve our economic situation. Sometimes, people opt to apply for a loan when they need money to cover an unexpected expense.
In this case, it is vital to be focused so we don’t end up falling into scams that can put our finances at risk.
Here, at SafeLoan, we work with honesty and transparency to provide the best personal loans for our customers.
Hence, we feel the need to warn people about possible scams so the loan process can be secure and optimal.
After reading this blog post to its fullest, you will comprehend:
- How to spot loan frauds.
- Tips for picking a suitable and safe lender.
- How to investigate lenders before making a firm decision.
Sadly, scams are now part of our regular lives. The different communication channels can be used to deceive people into giving their money without an honest outcome.
There are many reasons why we might be looking for personal loans or other types of loans. You might have the need to improve your home, or perhaps you just want to complete debt consolidation.
Whatever your case is, it’s crucial to understand if the lender you are trying to get funds from is legitimate.
Remember that, at the end of the day, if your economic situation is not good enough, a scam might end up ruining it even more.
Of course, there are alternatives to dispute scams based on each state’s laws, but the wiser thing to do is to be aware so that we can avoid these scenarios.
Without further hesitation, these three tips will help you recognize scammers in the blink of an eye, so don’t skip on them.
They ask for money upfront
This is a classic of scammers all around the world. If you see that someone is offering a loan, but you need to send them money upfront, don’t fall for it! It is obviously a scam.
They always promise to send you money after receiving the first payment. Hence, knowing this will help you recognize a scammer when you see it.
Reputable lenders will never ask for your money upfront. This is a fact, so don’t ignore this piece of advice if you don’t want to lose your hard-earned money.
They don’t perform credit check
Lending money involves risk. The best way for lenders to reduce this risk is by performing credit checks.
Knowing your credit score will tell them the likelihood of you paying back the borrowed money.
So, if they claim not to perform a credit check, they might as well don’t care if they lose that money. Hence, it’s probably a scam.
All legitimate lenders check the credit report first. This is a must among financial institutions.
Besides, if you want to apply for a loan but have a bad credit score, someone claiming to give you money without even checking your score is suspicious. Keep your eyes open!
It seems too good to be true
Let’s be totally honest with ourselves. Loans, sometimes, are expensive. The lender’s business is to borrow money and then produce revenue through fees and interest rates.
As a consequence, if you think the offer is too good to be true, well, it’s not true at all!
This applies mostly if you have a bad credit score. Remember that the better your credit score is, the higher are your chances of getting better interest rates.
On top of that, remember that a reputable financial institution will never pressure you to immediately make a decision. In all these scenarios, the right thing to do is to run away from there and report the possible fraud wherever you can.
Phishing scams are now more frequent than ever before. Their goal is to gain access to an account or a computer so they can steal vital financial information from a target.
The thing is that most of these emails look like they are being sent from a reputable financial institution. All they want is to trick you into providing personal information. If you want to identify phishing scams, follow these three pieces of advice:
- Poor grammar: a financial institution will never write a grammar mistake. We know we are all humans, but if you see misspellings, don’t click any link on the email.
- Email attachments: do not ever automatically open email attachments. Most types of files can be used to deliver malicious payloads.
Carefully check the email address: if the email’s subject line looks professional enough, you might fall for it. In this case, the best course of action is to check the email address and verify if it is a legitimate one.
We must always ensure the lender we are about to work with is legitimate. Try to always perform deep research before making a final decision.
You can always check reviews on external websites and even check the lender’s professional site. This will give you valuable information when it comes to finding the safest lender for you.
We recommend having a comprehensive list of lenders and checking how they communicate. In case you notice something out of place, it will be easier for you to check the credentials of a lender.
Understanding the interest rates and fees charged by lenders will also give you powerful insight into your future. Keep in mind that it is up to us to avoid scammers, nobody wants to lose their money to fraudsters online.