8 Ways to Identify and avoid Loan Scams

You may need loan to start up a business, you need to be careful not to enter the hands of loan Scams. At the end of this article, you will be able to Identify Loan Scams and how to avoid them. You will also see their warning signs so as not to fall victim to them.

Obviously, thousands of people these days request for loan either for business purpose or for personal use. Either of which, it is important you take note of these 8 ways to identify loan scams.

8 Ways to Identify Loan Scams

Most of these platforms portrait juicy offers ranging from no or lower interest rate to larger sum of loan offer. When you see any of these signs as stated below, it will be of your interest to avoid such platform as it will do you no good.

1. Copycat Name

In order to get trust and appear legitimate, unscrupulous loan scams will come up with a business name or website that looks genuine. It’s always advisable to check with the ms-legit to authenticate the address and phone

2. Red Flags

There are several things that should prompt immediate concern. Be suspicious of email messages contain errors in spelling, capitalization, punctuation and/or grammar. That’s a lack of professionalism. Be wary if you get a free period (like a year with no payments) before the loan must be repaid. Definitely beware if the lender says they don’t use credit checks and will lend money regardless of past financial problems.

3. No Interest in Your Credit History

Real loan lenders will have to go through your credit history to be sure your credit is worthy of the amount you are requesting for. Even when they come saying “No Credit? Bad Credit? No Problem!” avoid it else you will get scammed.

4. Upfront Fees

Legitimate lender will never ask you for upfront fee. For instance, someone is in need of N100,000 and a lender is asking such a person to make an upfront or registration fee of N10,000 in other to access the loan. That is a real scam and you should stay away from such offer. Legitimate lenders will disclose all their fees before you go ahead with your request and some times part of the loan not bringing a fee on the application process.

5. Wire Transfers

If the lender demands you to wire money for fees, that is another red flag. Never wire or transfer money to an individual. Always ask for the lender’s physical address. Then reach out to the Attorney General or Financial Regulations office in the state to verify if it is a legal business or a loan scam.

6. Personal Information

Never give out any important personal information such as bank account number, date of birth, phone number to any loan platform unless you are sure of the authenticity of such platform. Loan scammers can use your personal information for identity theft or steal from your bank account.

7. Customer Service

Reputable lenders have phone numbers you can call. If you are not comfortable with customer service, you shouldn’t give the company your business. Don’t settle for the phone robots, either. You should be able to speak with a person.

8. State Registration

As stated earlier, before going ahead with any loan application, you need to concult your state Attorney General’s office Financial Regulation or Department of Banking to to be sure the lenders and loan brokers are registered in your state where they do business. That won’t guarantee the perfect experience with the lender, but it can help spot a loan scam.

Conclusion

This post is not trying to scare you away from getting loans to solve urgent needs. The aim to make you to be watchful when accessing these loans due to the high rate of scam in the country today.

Thanks for reading.