If you’re in need of some quick cash, a personal loan is a great way to get the money you need exactly when you need it.
However, there are a number scammers out there masquerading as lenders looking to steal your finances.
As the following article shows, in order to keep your financial information safe, here’s a look at how to detect & avoid personal loan scams:
Research, Research, Research
Before you decide to accept a personal loan, it’s important to thoroughly research the loan provider. There are a number of lenders out there, but not all of them are worthy of your time.
By reviewing the lender’s Better Business Bureau (BBB) rating as well as checking their customer reviews and comments, you can gain a better understanding about their loan practices. You can also Google the company’s name with the word “scam” or “scam alert” to see if they’ve ever been accused of fraud.
Click the BBB Link
The Better Business Bureau is your first line of defense against online scams, but only if you check the link. Many fraudulent lenders include a BBB symbol on the homepage that links to nothing. This is a clear sign that the business is fraudulent.
The BBB symbol should link to the official Better Business Bureau website where you can check the lender’s business rating and reviews.
If the lender does link to the BBB website, but the business has poor ratings, it’s probably wise to avoid getting involved with the lender altogether.
Advance Fees = Red Flags
You should never have to pay in advance to borrow money before you even receive the loan. If you find a lender who asks for a deposit or insurance advancement before loaning you money, walk away – no matter how small the fee.
Scammers are using the fee advancement trick as a way to either gain access to your financial information or simply steal your money.
Let upfront fees act as a red flag in your search for a legitimate personal loan lending business.
Peruse Documents Closely
Documentation in the loan process is unavoidable, but that doesn’t mean you shouldn’t study each document closely. This is especially the case when applying for the loan itself.
You should never sign or include your personal information on any document that doesn’t describe your exact loan amount or the lending terms.
Likewise, if the document has any spelling or grammatical errors, this should also act as a warning sign that the contract is not legitimate.
Established personal loan lenders have contracts that are thorough and completely free of errors.
In addition, if you’re filling out the document online, make sure there is a padlock symbol in your browser. This ensures no one else sees the document but the lender.
Check for Scam Alerts
The Federal Trade Commission (FTC) issues Scam Alerts on their consumer information homepage on a regular basis.
Included on the homepage is a section on money and credit scams, which provides the most up to date information on financial scams. Before you search for a personal loan, browse through the Federal Trade Commission’s Scam Alerts and avoid fraudulent companies.
When it comes to safe borrowing, keep in mind the pointers above while on the hunt for a personal loan.
About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including finances and online safety.