There’s no doubt that personal loans are a tremendous help when seeking financial assistance. However, if the deal seems too good to be true, you may want to think twice before signing on the dotted line. Here are five major warning signs of a personal loan scam that would be wise to look out for.
The Lender Requests Upfront Fees
Many scam artists will ask applicants for upfront fees to cover non-existent charges, claiming they’re for paperwork, insurance, and processing. To avoid giving money away, ask the company for an itemized list of costs and fees associated with the loan; they should have no problem providing it if they’re a legitimate business.
The Lender Encourages Unfamiliar Forms of Payment
In an ethical, genuine, and legal setting, a borrower will make loan payments to the lending institution. If your lender asks for repayment in the form of a gift card or direct payment to a specific individual, it would be best to avoid them.
A legitimate company should never ask you to wire funds. In this case, you want to seek lenders that allow automated payments, online payments, or payments over the phone. Legitimate lending institutions may also ask for checks mailed to a physical address.
The Lender Cold-Calls You
Genuine lending companies will never reach out to you via phone to try and gain your business. Legitimate institutions will never send letters or knock on your door to speak to you about payments before ever delivering a loan.
The Lender Doesn’t Have a Physical Address
Your lender should have a physical address and contact information that allows you to speak to them and address any concerns. If the institution only has a website or a PO Box as its physical address, it’s highly likely to be the location of a scam artist.
The Lender Does Have a Reputable Website
While lender websites can be tricky to navigate, fraudulent institutions will try to fool borrowers by creating websites using logos that are similar to legitimate businesses.
In this instance, remember to look out for a padlock icon in the search bar where the web address appears. You should also note “HTTPS” in the address bar, indicating the website is secure.
Personal loan scams are no laughing matter; however, knowing the five major warning signs can help you pinpoint scammers looking to take your money and identity. It helps to conduct business with a company you can trust, so feel free to reach out to Superior Financial Services.
We’re a Tennessee loan company with seven branches and experts in the local community who would be glad to assist you in acquiring the funds you need.