Getting a loan is a major decision, and you don't want to be scammed. Therefore, you always want to ensure you build a trusting relationship with your lender. Creditors who aren't on the up and up can overcharge you and harm your financial situation rather than help it. Here are some of the most important signs you need to take note of to ensure your loan is from a reliable lender.
There are several red flags you should be on the lookout for when you're getting a loan since there are a lot of scam companies out there.
Scam lenders are on the rise, mainly preying on people who've fallen on hard times in the wake of the COVID-19 pandemic. Their tactics have gotten more sophisticated in recent years, and it's always good to have a scrutinous eye when you're enlisting someone's services online.
Online lending is convenient, but you always want to make sure you can verify the lender's authenticity before borrowing.
If you're being offered a loan, you'll always want to go the extra mile to verify their authenticity, and it doesn't take long to check out their credentials and online presence.
Get started online to see what their reputation looks like. Simply searching the business's name is often enough to give you a rough idea of its reputation. What do their clients have to say about the lender? What do online forums report about their customer service?
You'll want to be careful when looking over reviews from the lender's website since these can quite easily be fabricated using multiple alternate accounts. Instead, hunt for news articles about the website, publications, or any internet data referring to the website.
This can paint a pretty accurate picture of how the company is performing. You can also check out lenders through the Consumer Finance Protection Bureau (CFPB), giving a lender's reputation A through F rating.
The CFPB is another valuable resource since it allows you to search for businesses and see their dispute history, giving you advanced notice if something's off about their guarantees.
Lastly, the Attorney General is another valuable source of information since the office has a repository of business dealings and records that will tell you whether the lender is worth trusting.
If your lender checks out with these three sources, you can safely assume that the business is legitimate and will operate by the terms laid out in your agreement.
Of course, when it comes to lending, knowing what red flags you should be on the lookout for is imperative. Even though some things might seem normal, they could be signs that a company is trying to scam you.
For example, if a lender tells you to indicate that your income is higher than it is, then it's an alarming sign that the lender is not legitimate.
You should also be wary of lenders pressuring you to sign documents you haven't reviewed, changing the terms of your agreement, or offering you blank forms to be filled in later.
You always want to make sure the fine print of your agreement is laid out for you to see and review. Always keep copies of the documents you've signed so that you have a legal understanding of what you've agreed to and copies of your records.
In general, you should be wary of any lender trying to pressure you into a loan. There are often other options, and loans should only be considered for emergencies. They are not intended for frivolous purposes, and any lender pushing you into a loan isn't worth your time.
If something sounds too good to be true, it probably is. Any lender that guarantees your approval isn't worth trusting.
Lenders who are willing to work with you need to assess their risk and will run your credit report. They are interested in your trustworthiness, while fraudulent lenders are not. If a lender doesn't seem to want any information from you before proceeding, it's likely to be a scam.
As mentioned before, lenders are required by the Federal Trade Commission to be registered in their states. So with that in mind, check the lender's website to see if they list the states they're operating in.
If there's nothing, then you may be dealing with a scam. It's always a prudent idea to verify that lenders are registered in your state; if they aren't, then they don't have any legal authority to loan money to you.
Scammers will claim that they need payment in various forms, such as debit cards, banking information, or gift cards. This behavior is a strong sign of a scam since lenders who deduct fees will do so directly from your loan, not through another form of payment.
A prepaid card is an especially alarming red flag since it's untraceable and can't be reported as stolen. Considering this problem, make sure you only contact your trusted lender through their official website.
Reputable lenders will rarely call, mail, or go door-to-door. Scammers, on the other hand, will try to offer you loans over the phone, by mail advertisement, or by chatting with you directly.
If a lender offers you a loan and asks you to pay before delivery over the phone, it's a scam. Doing so is illegal according to the Telemarketing Sales Rule.
Phone scams can be particularly devious, often swapping out their name with that of a recognized lender to show up on your caller ID. In light of this issue, ensure you only contact your trusted lender through their official website.
SimpleFastLoans is a reputable online lender that checks all the boxes for trustworthiness. So if you're in a pinch and need cash to tide you over, their different loans can help you.
You never have to worry about hidden fees, contracts, or payments, since SimpleFastLoans will disclose all the arrangement details for you.
Your personal data will never be shared or sold; if you want to review their disclosures for each state, you can do so directly from their website.
You can also see their terms and conditions at the bottom of the page, evidencing that they have nothing to hide in the lending process. If you need a loan to tide you over, SimpleFastLoans is a trustworthy lender you can rely on.