The internet has made it easy to get loans from different companies without going through the traditional banking system. Unfortunately, this has also led to a rise in loan scams, in which dishonest companies trick people into giving them money or personal information.
The Federal Trade Commission says that consumers will lose a total of nearly $5.8 billion to scams in 2021. This is a 70 percent increase from 2020. And people who are most in need or most likely to take a fake deal are the ones who get scammed.
If you are not careful, you might fall for a personal loan trick and lose money. But you can learn how to find out if a loan company is real so you do not fall for a scam.
To keep from falling for a loan scam, you should know how to spot one. This piece will tell you how to tell if a loan company is trying to scam you.
Check out how the company is known.
One of the easiest ways to find out if a loan business is real is to look up information about the company online. Look for reviews from past customers on websites like Trustpilot, BBB, and others. If the company has a lot of bad reviews or has been reported as a fake, it is best to stay away from them.
Watch out for fees that you have to pay right away.
A loan company that is real will never ask for money or fees up front. Most likely, it is a scam if a company wants you to pay an application fee or a processing fee before you get the money. Legitimate loan companies will not charge fees until after the loan has been accepted and the money has been sent to the borrower.
Check out the rates of interest.
Be wary of loan companies that offer interest rates that seem too good to be true. If the interest rate is much lower than what other legitimate companies are giving, it is probably a scam. Before making a choice, you should compare the interest rates of different companies.
Look for a seal of approval
A genuine loan company will have been approved by a well-known group. Check to see if the business is a member of a reputable trade group or has been approved by a group that regulates the industry. Accreditation is a way to make sure that the company is following the law.
Check your contact info
Check to see if the loan company’s website has a real address and phone number. Scammers often use fake phone numbers and addresses to avoid getting caught. You can also call the number given to make sure that it is real.
Be wary of offers you did not ask for.
Be wary of loan companies that send you deals you did not ask for. Scammers often send people offers they did not ask for through email, text, or social media. If you get an offer you did not ask for, find out more about the company before you accept it.
In conclusion, if you do not want to be scammed, you need to know how to spot a loan scam. Make sure to do your study and find out about the company’s reputation, fees, interest rates, accreditation, and how to contact them. Be wary of offers you did not ask for or that seem too good to be true.
If you think a loan company is a scam, you should tell the right people so that other people do not get scammed. Remember that preventing a problem is better than fixing it, and the best way to avoid loan scams is to only work with real loan companies.