How to Identify and Avoid a Personal Loan Scam

Banks and other organizations may have too tough requirements for you or maybe your credit score is very bad; the only option left is to opt for licensed money lenders. While the internet world has brought many services for us, there are always some people who try to spoil it for everyone. Those people are commonly referred to as scammers. You might face such a few individuals pretending to be a legitimate licensed lender. People tend to make bad decisions when they are in a difficult position, and these people take advantage of that. If you are to ever take a loan from a legal money lender, make sure you use these tips to differentiate between a legit lender and a scammer.

 

Did They Ask for Credit History?

If it’s too good to be true, it’s not true. Why would a lender give you money if he has nothing to gain from it? A legit lender will always check your credit history. They have to ensure that you will be able to pay them and not just take away their money. Their rules are lenient compared to banks; otherwise, no one would go to them. But it doesn’t mean they will give away money to anyone. Visit only a trusted and reliable loan directory for licensed moneylenders like Smart Loan when you find yourself in need.

 

Are They Licensed By the Law Ministry?

Take loan only from a licensed money lender. They have to get a license from the Ministry of Law if they want to issue loans. Before you go for a loan, always ensure that they are licensed. There are many different types of loans you can get online. Identify the type of loan that is best for you and whether the lender is allowed to provide that or not.

 

Incomplete or Misleading Information

Some lender may try to attract you by providing incomplete or misleading information. You might be thinking that you are getting a good deal, where in fact, they might get you to sign where you shouldn’t. Don’t shy from asking questions. If they tell you something which could have more than one meaning, there probably will be another meaning. Moreover, carefully read the documents before you sign anything.

 

Do They Have an Office?

A proper business would have a physical address where you can visit them. If a person has just created a website and started offering money lending service, you should be careful with them. You can’t trust a person whom you can’t physically reach. They are anonymous online; if they are to pull a scam, you won’t be able to do anything about it.

 

Guaranteed Approval

If there is guaranteed approval, there is a trap. How can one guarantee that he will give you money without knowing who you are? Professional lenders have to see if you have the resources to pay them back and that you are not a scam. A lender won’t be able to get his money back if you go into hiding after taking a loan.

 

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