How to Spot Personal Loan Scams?

13 Jul 2020

……….warns residents against personal loan scams

……….arrested who allegedly scammed public for a personal loan

……… sophisticated bank scams arise.

You often come across such headlines. Financial literacy is still a concern and these results in lots of scams across the nook and corner of the globe. In this blog, let’s find out how we can spot personal loan scams.

You make your dreams come true with personal loans. Right. They help you meet urgent financial needs. Personal loans are easy to access and avail, but at the same time, you must be careful while choosing the personal loan lender. Often in a hurry to get the money, we end up with a lender who can be a fraud. This is a common scenario, especially in times like today when you can find many phishing cases. Well, we have got the way out for you. The first thing is that as a borrower you must not let your needs and wants to overshadow your logical and analytical thinking process. Be a bit aware and cautious about the things happening around you. Just follow a few simple tips, and you can easily spot personal loan scams.

7 ways to spot personal loan scams

1. If the lender doesn’t ask for a credit check - Remember, your credit score is the most crucial aspect that the bank considers before approving your loan application. A good credit score is a must to get your loan approved, in case the lender is not asking about your creditworthiness then it’s a warning.

2. You cannot locate a physical address - Well, one of the first things that scammers do is that they don’t want to leave any mark so that you can catch them later. Such people will not have a physical address and would like to avoid situations where someone would ask for the address. If you too encounter such lenders, make sure you stay away.

3. Unregistered lender - The lender needs to have a license. If you come across a lender who is not licensed to operate in your state, then you might have stumbled on a fraud company.  

4. Incomplete offer - If you are applying for a personal loan, then you need to be cautious about the offer they are giving you. The Lending Act asks the lender to provide complete information about the final cost along with interest before you sign across the dotted lines. If you find such details missing from the offer, then you must move back.

5. Upfront payment – If your personal loan lender is asking for processing fees, insurance fees or origination fees before approving your loan, then it is a scam.

6. Extreme low Personal loan interest rate – Check the industry standard, it will give you a fair idea about the interest rate. If a lender offers you the personal loan at a very low-interest-rate as compared to the market standard, then it is essential to have a thorough check.

7. Check their website - A legitimate personal loan lender will have a legit site, if a lender contacts you and his website is insecure, and then there is a greater probability that it is a scam and the lender is a fraud. If you see that the URL of site lacks “s”, for example, it is http instead of https, and then you must know that it’s a fraudulent website and you must keep them at bay.

The need for money sometimes hinders our thinking process, and we end up in a mess. Thus, it is advisable that one must be aware of what is happening around, analyze the lender and once they fulfill the parameters of being a legit company, then only one must apply for a personal loan. We would like you to have a glance at some of the prominent lenders of the market and the interest rate they are offering.

S.No

Personal Loan Company

Loan amount

Loan Period

Credit Card score

1

LightStream

$5000 - $100,000

2 -7 years

Not been disclosed

2

SoFi

$5000 - $100,000

3 -7 years

680

3

Earnest

$5000 - $75,000

Up to 5 years

680

4

Discover

$2500 - $35,000

3 -7 years

660

5

LendingPoint

$2000 - $25,000

2 - 4 years

580

6

LendingClub

$1000 - $40,000

3 - 5 years

600

7

NetCredit

$1000 - $10,000

0.5 – 5 years

Not been disclosed

8

FreedomPlus

$7500 - $35,000

2 - 5 years

600

9

Upstart

$1000 - $50,000

3 - 5 years

620

10

Prosper

$2000 - $40,000

3 - 5 years

640

11

Peerform

$1000 - $25,000

Up to 3 years

600

12

Best Egg

$2000 - $50,000

3 – 5 years

700

13

Discover

$2500 - $ 35,000

3 – 7 years

Not been disclosed

14

Rocket Loans

$2000 - $35,000

3 – 5 Years

640

15

Payoff

$5000 - $ 35,000

2-5 years

660

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