How to spot online loan scams
LOS ANGELES â January 26, 2022 â (Newswire.com)
iQuanti: Online loans are a way for lenders to offer quick cash loans to borrowers without meeting in person. These loans are a useful tool when you need quick access to cash that you can repay quickly. And while it can be difficult to find good online loans without credit check, many lenders have lenient credit score requirements and will approve borrowers with poor or fair credit. But since many online lending companies are entirely digital, they are also targets of scams. So if you’re considering an online loan, protect yourself by knowing how to spot online loan scams.
What are online loan companies?
An online loan provider lets you go through the loan process entirely online, from application to approval. While some banks and other well-known institutions may offer online lending as part of their product line, other companies may forego physical locations to offer lower fees to their customers. Unfortunately, some scammers may appear to be legitimate lenders, so knowing how to identify a scam is essential.
Six ways to spot online loan scams
Getting cashed in on an online loan scam can wreak havoc on your finances and credit. That’s why it’s essential to be aware of these ways to spot online loan scams. Your scam radar should go off if:
- The company is not legit, according to reliable sources. Resources like the Better Business Bureau exist to help consumers confirm whether companies are legitimate. Also check public records and company reputation on other review websites.
- The company’s website is not secure. Any website requiring personal financial information must be secure. With secure websites, you should see a padlock to the left of the web address (URL). This lock means that information sent and received by the website is securely encrypted. Websites without locks can be fraudulent.
- Lender’s website has many issues. Another major red flag that can mean a scam is the presence of numerous grammar or spelling issues. A reputable company will have a team responsible for managing the website, including ensuring that the customer experience is enjoyable and that the information is easy to read and understand.
- The lender urges you to act now. A reputable lender won’t rush you into a decision, but will allow you to gather information and apply when it’s convenient for you. But a company operating a scam may require you to act immediately to lock in a promotional rate. In reality, their pressure is because they hooked you with a scam and are desperate to get your money before you know it.
- The company asks you to send money first. Some online loan scams target individuals by asking them to send money up front to secure a loan or pay a fee. They may even ask you to submit payment in the form of a prepaid credit card. This is a major red flag that should cause you to quickly close the browser window. More reputable online lenders will likely include a fee in the loan amount, subtracting it from the loan they send you.
- The lender does not care about your credit history. Many online lenders will use credit rating and history as eligibility criteria before approving you for a loan. So, any lender offering online loans without credit check who insists that credit score doesn’t matter should make you think twice.
The bottom line
Online loans are a convenient and quick way to get the money you need. But before providing personal information to a potential lender, it’s important to assess the company to make sure it’s not a scam. Beware of major red flags like an unsecured or poorly maintained website or lenders pushing you to act now or send them money in advance. Being aware of these common online scams can help you stay safe while increasing your chances of getting the money you need.
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How to spot online loan scams