How to Avoid Loan Fraud How to Avoid Loan Fraud
shares Facebook Twitter Google+If you are having financial difficulties, you can be an easy target for those involved in loan fraud. Why is that?... How to Avoid Loan Fraud

If you are having financial difficulties, you can be an easy target for those involved in loan fraud. Why is that? That’s because these fraudulent companies offer to ease the financial woes you are experiencing and to lend you money with the option of long-term repayment. However, in order for these companies to do this, you must be willing to pay a huge sum upfront, and then the loan money never shows up in your bank account. Sadly, there is an increase in the number of bogus loan companies operating. So, how do you avoid these pitfalls? Here’s what you need to look for to make sure you don’t fall victim to loan fraud.

What to watch out for

These fraudulent loan companies will find you and approach you by asking if you need extra cash. They often use the internet and email to reach out to potential victims, as well as magazines and newspapers. Whatever you do, make sure that you do not give out any of your banking information unless you are completely confident in the company.

When you contact these companies, they will tell you that there is no problem with you getting a loan. Then the catch comes up – you will be required to pay a large fee upfront before your loan can be arranged. The problem is that desperate unsuspecting borrowers have shelled out thousands of dollars to receive one of these approved loans only to find that the money is never coming forth.

Sometimes they will ask you to make the first payment over the phone, and they will ask you for your banking details. Then this fraudulent lender disappears with your cash and banking details, leaving you without the loan and even more in debt.

When you are approached by any loan company that seems to fit your exact needs, you should always proceed with caution. There is almost always a catch if you are offered easy cash regardless of your poor credit. Remember, if it sounds too good to be true, it is.

Check lender’s credentials

If you are thinking about getting a loan with any lending company, first thing you should do is check to see if the company has a registered address. Always do your research before you sign up and before you give any of your personal information, and certainly before you give any banking info. Call the number they have provided. See if the company has an online presence, and if you can find any reviews from others that have borrowed from them. Make sure you check these reviews to confirm they are valid and not fake. If you cannot find an address and domestic phone number for the company, your suspicion radar should be going crazy.

If you are getting cold calls from a lender, be wary. When you are having financial difficulties, it makes you vulnerable, and it is important for you to keep your best interests in mind. You should not feel pressured by any lender to take a loan from them. Anytime you feel a lender is bullying you into accepting a loan from them, you should say no and look elsewhere.

Never give out your bank details without being entirely confident the company is legitimate. There are many online sites where you can find a personal loan from a trusted lender.

[Featured image credit: "Fraud” by GotCredit, used under CC BY / Image cropped]

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