We can all dream of a perfect world where everyone is kind and loving to one another. Unfortunately, that world isn’t our world. Since the beginning of time, people have been lying, cheating, and scamming each other for their own benefit. That said, did you know that there is such a thing as a loan scam? There is, and such a scam has tricked many people. As such, when looking for a loan, being wary of such scams will allow you to avoid being duped and increase the likelihood of finding a genuine, reliable lender that can offer you great loans.
Of course, you’re here today to learn how to avoid being scammed when looking for a loan. So, with that in mind, we want to share with you some loan scam signs that you need to identify, telling you that you’re getting scammed:
Sign 1. Bad Credit Reporting
One of the biggest red flags that the lender might be trying to scam you is that of reporting your credit. You must be aware that lenders can now pull your credit reports in order to see what sort of credit situation you are in. If your credit is bad and you’re trying to get a loan, then the lender will have to know this. This is regardless of whether the lender is a scammer or not. However, this is an advantage to the scammers.
With this in mind, let’s say that you apply for a loan, and the lender pulls your credit report. If your report makes it look like you have terrible credit and are desperate to get a loan, the lender will let you know that they can offer you a loan with great interest rates.
Here’s the catch, though. The lender will tell you that in order to accept the loan, you will need to pay a processing fee to move forward with the loan. While you may think this is only a few hundred dollars, you can bet that the lender will take more than that from you. If they tell you that they need $500 to process the loan, then they’ll likely take $1,000 out of your account.
In the end, the lender will take your fee the money you need for the loan, and you’ll be left with nothing in the end. So, if a lender is trying to take a fee or charge interest rates beyond what you’re comfortable with, then this could be a sign that you’re dealing with a scam.
Sign 2. Fake Reputation
Another sign that you’re dealing with a scam is that of the lender’s online reputation. The online world has been a gold mine for individuals looking to know a company’s reputation, and the same goes for individuals looking to understand a lender’s reputation.
With that in mind, the online reputation of a lender is a great way of telling you whether or not you’re dealing with a scam, and one of the biggest things to look for is any type of fraud or scam accusation. For example, if you go to Google and search for the name of the lender, you may see a message that says “John Doe is a scam” or “John Doe is fake,” and the message will be linked to the lender’s name. If you see this, then you’re dealing with a scam.
In addition to this, another sign that you’re dealing with a scam is that the lender is a fake corporation. For example, if you search for a lender and you see a random company name, but you don’t see a link to a company website, you’re dealing with a scam. Also, if you see a company name and click on it, but it takes you to a website that is not for that company, you’re likewise dealing with the scam.
Sign 3. Bad Loan Terms
While it is true that there are good lenders out in the world, you have to be aware that there are bad ones, too. If you’re looking for a loan and you’re going to a lender, and they offer you great loan terms, but you feel like something isn’t right, you’re probably dealing with a scam.
For example, if you feel like the lenders offer you great loan terms, but the rates are higher than you’re comfortable with, or you see that the terms are not very good, then you can bet that you’re dealing with a scam. Usually, the lenders who offer the best terms will be trustworthy and carefully take your financial situation into account. This simply means that if you’re offered something you’re uncomfortable with, say no because you’re likely dealing with a scammer.
Along with that, when dealing with a scam, you need to be aware that it’s likely that you’ll be offered a shrinking interest rate. For example, you’ve been approved for the loan, but before you get the money, the interest rates will go up. This is a tactic that the scammers use to get more money out of you, and it usually works because it’s hard to tell if you’re dealing with a scam.
Sign 4. They Want Upfront Fees
Another sign that you’re dealing with a scam is that they want an upfront fee. For example, if the lender tells you that in order to get your loan approved, you have to pay a certain fee “to comply with certain requirements,” then you’re definitely dealing with a scam.
The truth is that no lender will ask you to pay a fee before you get your loan. However, scammers know this. So, if you’re told that you have to pay for a loan, but you’ve already been approved, then you’re likely dealing with a scam. This works by getting you to pay for your loan, but the fake lender does not give you the money you were “approved” for.
So, after you pay the fee, you will be left with nothing, and you’ll be left with your bank account in the red.
Really, if anything seems too good to be true or leaves you feeling uncomfortable or unsure about it, it is better to bail from the deal than to go through with it. Remember, a real and professional lender will do their best to offer you a loan that works to meet your needs while still being financially sound. Plus, they also know that trust is the key to success, so they will do whatever it takes to earn your trust, which is through good business! So, if you do not want to deal with scammers, do your initial research first for reputable and reliable lenders near your area. That way, you can be sure that you aren’t going to be duped when you reach out to the lender!
Get Approved Canada are loan experts offering excellent, trustworthy loans, from personal loans to mortgage loans and more. If you are looking for the best personal loans and more, reach out to us today!