The era we are living in is ruled by technology. Be that shopping, cleaning services, or even banking everything has been hit by technology. Providing people with better solutions to the existing problems and adding convenience into their lives.
It is as a result of technology that people today enjoy the perks of living in the modern age of the internet. Everything is readily available for the people on the internet. On the one hand, this has made the lives of people comfortable, while on the other hand, it has exposed people risks of cybercrime, scams, and frauds.
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 threat.
Some red flags have been gathered to help save the people from getting trapped by shady lenders. These will help them stay alert and safe from being scammed by fake lenders!
Usually, a legitimate lender will not ask for payment upfront. 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 of 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, they either are 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. And 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 or 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 a fraud.
Loan lending and borrowing is a process that has to 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 alerts websites by 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 alertness. Taking loans is not something anyone likes. But at some point, in life, a situation arises which 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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