If you are strapped for cash, a personal loan is a great financial help. Availing of finance from banks and lending institutions gives you the funds you require for medical emergencies, wedding, further education, asset purchase, and other requirements. However, there are numerous scammers in the finance market who take advantage of those in desperate need for cash. Individuals with cash and credit problems become an easy target for such fraudsters. It is, therefore, necessary to conduct extensive research about lending institutions before applying for a loan.
Always watch out for certain tell-tale signs that separate scams from the genuine deal. Following are six signs of personal loan scams that you need to be aware of.
Many times representatives may ask you to provide personal details through the Internet like bank account information, residential address, credit card number, and other sensitive information. This is known as phishing. Such information may be used to steal your identity and open credit accounts. Therefore, do not reveal personal details unless you are absolutely sure about why the information is being requested.
- No credit score check
Since personal loans are unsecured loans, no collateral is kept against the loan in case the borrower defaults on repayments. Personal loans are provided on the basis of the creditworthiness of the applicant. Therefore, if the lender assures you of loan approval without conducting a credit score check, be skeptical. Chances are that you may get duped later.
- Upfront fees
Generally, you are not required to pay any fees at the beginning of the loan process. All costs including application fees have to be repaid with the loan amount. Hence, if the lender asks you for an advance payment under the guise of a processing fee, be sure to check the authenticity of the lender. Paying an upfront fee will leave you in a bigger loss than ever.
- Insecure websites
Quite often scammers impersonate the websites of reputed banks and lending institutions. The newly made website looks so similar that it fools individuals into believing it is a genuine site. Therefore, check closely for the authenticity of the site before you apply for a personal loan online.
- Pressure to apply immediately
If the lender claims that you need to apply immediately, you must tread cautiously. Do not fall prey to the urgency plea. Cross check the loan details with the physical branch. Moreover, insist on receiving loan-related paperwork so as to avoid getting cheated.
Fraudsters go the extra mile to ensure their scams look genuine and professional. Hence, it is important to conduct extensive research before you opt for a personal loan online. Even if you are in dire need of finance, do not fall prey to any schemes. You must be aware of any prevalent scams to protect yourself from getting duped. You may also seek financial expert advice to arrive at the right decision.