When you are desperate for money, you can easily fall victim to loan scammers. When you want to get a loan, try and do background research to know whether it is a legit money lending company or a loan shark to be on the safe side.
The licensed money lending companies’ information can be found on the MinLaw website. Whenever you get approached by a money lending company, it is important to check whether they are listed on the website. You will be able to differentiate between licensed money lending companies and loan scams.
Loan scammers can even pretend to be other licensed lenders by giving you offers to check whether you will fall, victim. It is so bad when victims realize that they have been scammed only by loan sharks when the worst has happened.
You can even get threatened when you fail to pay the loan on time. You need to consult reliable money lending companies like Avis Credit Money Lending Company for the best loan packages.
How To Identify And Avoid Loan Scams.
1. Ask For Processing Fees
Most of these loan scams will ask for some processing fees before they give you the loan. Therefore, if you are not careful, you will end up paying the amount even before your loan is processed.
Legal money lending companies don’t ask for any money before they process your loan request. If you ever get approached by a money lending company that requires you to pay a processing fee, just cut off communication with them.
You can also report the loan scammers to prevent them from conning other people. Remember when the “deal is so good, think twice”.
2. Advertising Method
Loan scammers can approach you through an SMS, call, or email. That is not right. Legal moneylenders only communicate through their websites or social media accounts without necessarily coming into your space by making calls, sending SMS, or emails.
Legal moneylenders are only allowed to communicate through business directories or outside the business premises. This should help you be on the lookout.
3. Fast Approval
Even legit moneylenders offer fast approval. However, loan scams can easily approve your loan without getting information about you or your business. Therefore, if you find that the person who approached you has a “guaranteed approval” mentality, try to see this as a red flag.
Licensed moneylenders will take the time to check the documents that you have presented or uploaded online to check your creditworthiness. They will be careful to check whether you will manage to pay the loan on time.
You even find that these loan scammers can approve your money request even before you are sure of getting one. This is especially true when you need money, and they will play with your psychology.
4. Require Fast Responses
These loan scams always act as if something is urgent. You will find that they will keep pestering you till you take up the loan. They offer to deceive you that if you don’t apply for the loan immediately, the opportunity may get lost.
Therefore, if you need money, you will send the processing money immediately without thinking twice. Genuine licensed moneylenders take their time before they issue you the loan. Therefore, if a moneylender seems to treat the whole process as an emergency try and do a thorough background check. Saying No can save you from a loan scammer.
5. No Physical Address
These loan scams don’t normally have a physical address. You can even request their website details, and they might refuse to give you those details. Legit money lending companies tend to have a physical address where you can go to talk with an agent regarding your loan application without any issue.
These loan scams tend to operate from their mobile phones without necessarily having a physical location. Therefore, if you doubt a lender, consider asking for their physical address to certify. If they hesitate to answer some questions, consider it a red flag.
6. No Signing Of Loan Contract
A loan scam will even give you a loan through the phone without you having to sign any documents. The loan contract can either be a paper contract or an online contract based on the kind of loan that you are taking up.
These loan scammers don’t normally provide any loan contracts. Therefore, if the money lending company seems to want to give you a loan without a contract, just run. This is because they wouldn’t want to have any evidence that can expose their illegal dealings.
In Summary, This Is How To Avoid The Loan Scams
Therefore, to be on the right side you can do this:
- Ignore any loan advertisement on the wrong channels.
- Do background research.
- Keep your personal information private.
- Don’t send any processing fees.
- Check the interest rates and repayment plan.
- Report the scammers.
How To Identify A Licensed Moneylender
The licensed moneylenders tend to be the opposite of the unlicensed moneylenders. They tend to use a professional approach to give details on the loans that they offer and any other important details. They also do thorough research to check whether you are capable of paying back the loan.
This is where your credit score comes in. In addition, they only use business directories, their websites, or advertisements on their premises to tell you about their loans. They won’t send out SMS or emails.
They also don’t skip any processes, they follow them to the latter. Their approval rates, interest rates, and repayment periods are reasonable and not rushed. Therefore, you will be able to make sober decisions even when you are really in need of money.
Conclusion
Whenever you have a gut feeling that the money lending company is not legit, try and trust your gut to prevent entering into a deal with a loan shark. Regardless of how interesting the loan term seems, you may end up paying back more money than what you borrowed.
Therefore, try and take your time before taking up and loan. Also, try and be careful not to take loans when you are desperate for money, you might make the wrong decisions. All the best as you get a loan from a licensed moneylender.
