Online loan scams remain a threat to many borrowers. In fact, it has never been worse than during this time of the coronavirus crisis, where people are using the Internet more, and, at the same time, suffering from financial hardships.
Reputable lending companies and brokers must register for a license in the state where they operate a business, as required by the Federal Trade Commission (FTC). Otherwise, the lender may potentially be a scammer.
How can you distinguish a fictitious lending company from a legit one? Check their physical addresses. Most reputable lenders tend to plug their address into Google Maps, while scammers would rather be untraceable to avoid legal consequences.
Bad-credit loan scammers require no credit checks and seem uninterested in timely repayment. But the truth is, you will incur excessively high penalties if you fall behind your payments.
A page isn’t secured if the page’s address starts with “HTTP” instead of “HTTPS.” The added “s” after “http” stands for “secure.” Having a secured website means the lender is concerned about the site’s integrity.
When a lender demands upfront fees for insurance, collateral, origination, processing, or paperwork before a personal loan is disbursed, it’s a scam. Reputable lenders may charge you for fees, but it would be directly deducted to your loan amount.
“Guarantees Loan Approval” is among the tell-tale signs of a loan scam. In fact, most lenders, including online companies, would not guarantee 100% approval when it comes to personal loan applications.