Our era is ruled by technology. Be it shopping, cleaning services, or even banking, technology has affected everything. Technology provides people with better solutions to existing problems and adds convenience to their lives.
It is because of technology that people today enjoy the perks of living in the modern age of the internet. Everything is readily available on the internet. On the one hand, this has made people’s lives comfortable, while on the other hand, it has exposed people to risks of cybercrime, scams, and fraud.
The facility of ordering loans online has really helped people. It saves their time from making frequent bank visits and also keeps them away from the hassle. But as the trend of online loans becomes common, an increased number of risks emerge. One of the most common risks an online borrower can get himself into is dealing with a shady lender. It can result in their money being lost, or they might end up paying way more than required, or they might become a victim of identity theft.
Some red flags have been gathered to help people avoid being trapped by shady lenders. These will help them stay alert and safe from being scammed by fake lenders!
Up-Front Fee
Usually, a legitimate lender will not ask for payment up front. The up-front payment technique is a common practice among thieves. If a lender asks for a fee to process an application, there are high chances that it is a scam. Well-reputed online lenders may ask for payments, but all these payments are explained thoroughly. While paying, a borrower knows exactly what he/she is paying for, which is not a case where the lenders are shady. Fee for application processing is only required in a situation when a borrower has to apply for a large loan, such as a home loan. Individuals who come across lenders requiring up-front payments must carry out a thorough background check and consult some experts.
No Credit Card Checks
Checking credit cards’ history is an essential step for processing online applications for loans. Loans are only approved if a person’s credit card history is clear. Also, it helps in checking if a borrower has enough ways to repay the loan. Legitimate lenders usually carry out soft credit card checks at the initial stage, and at the time of approval, a hard check is carried out. In a case where a lender does not care much about the borrowers’ credit card history, it is most likely a fake lender. It is advised not to be drawn by ads that say having bad credit card history is not an issue in online loans, because, in reality, it is!
Loan Approval Guaranteed
Another attractive ad that gains the attention of many online borrowers is “fast money guaranteed”. Guaranteeing the approval of loans is something that is not practiced among real lenders. Without a proper insight into a borrower’s credit history and other financial stats, none of the lenders can guarantee loan approvals. The online lenders that claim that they can approve anybody and everybody are either substantial risk-takers or they are probably fake.
Funds Transfer via Western Union or by Wire
First things first, a borrower applying for a loan does not send money. Even if some cases require payment, they are well-explained. Also, these payments can be made using credit cards or checks. If any lender asks for a fee via wire, Western Union, or MoneyGram, it is undoubtedly a scam. People need to understand that if a lender is not accepting payments through credit cards, they are trapping the borrower in fraud.
Secure Website
Loan lending and borrowing are processes that must be protected. In the case of online loan lending, the website through which it is being processed has to be secure. A legitimate lending site will include all the necessary security features. A genuine loan lending website begins with HTTPS and not HTTP. Therefore, as soon as an online borrower lands on a lender’s website, these are the first things to notice.
Reviews by Real Customers
Online reviews serve as one of the best ways to analyze whether a lender is genuine or fake. A basic online search can be beneficial. Along with this, borrowers can look for reviews on platforms like Better Business Bureau. Also, the scam alert websites by the FTC can also help. It is an essential step to figure out whether a borrower is dealing with a legitimate or fake lender.
Require Automatic Withdrawals
Allowing an online lender to withdraw payments automatically is the very first step into the trap. By doing so, a borrower puts their security in jeopardy. A genuine lender will not need permission to withdraw payments automatically. The lending websites offering more than one payment option are the ones to trust.
People can stay clear of scams, frauds, and shady lenders by looking for the above-mentioned red flags. These are all the possible ways a borrower can differentiate between a legitimate and a fake lender. Borrowing a loan is a sensitive matter and must be addressed with much caution. Taking loans is not something anyone likes. But at some point in life, a situation arises that makes a person opt for loans. No matter how difficult a situation is, a person needs to avoid making rash decisions.
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Brittany McMillen
Brittany McMillen