Whether it is a business or a personal loan, people from around the world are scammed by unlicensed moneylenders every year into quick cash loans and experience severe repercussions. These lenders scam people into contracts that look attractive and are designed for people without much know-how of the process. To help you avoid such scammers, here are five signs that can help you identify if your money lender is scamming you.
History is History
A moneylender who may be potentially scamming you will not emphasize your history. Unless you apply for a very short-term cash loan, such as a payday loan that is payable within a week or so, you lender will always ask for credit history. Some online scammers will usually ask you to fill an online survey in order to “analyze your credit history”, while others will ask you to fix your credit score through their credit repair service. This is most definitely a red flag for a scam.
Most moneylenders who are authorized to do business online will have secured domains and websites. If your moneylender does business online and asks for online payments or other details but does not have a secure connection, it is possible that your money lender is scamming you. You can identify this by simply looking at the URL, which, in the case of a legitimate company, will begin with https://.
A scamming lender will provide you with the most attractive deal possible, which will not only have a lower rate than the market but also offer better loan conditions. The reality may be that this fast loan is actually too good to be true. A good idea is to look around to get an idea of the general terms of such a loan. If your lender exceeds all these other offers, something may be off.
Upfront fees and collateral
This is a huge red flag for most scams. Fake lenders will emphasize on paying a hefty origination fee, or collateral in the form of gold, or other assets. Companies or legal money lenders who are able to get you a loan will not ask for hefty fees for processing, or such collateral that may be untraceable. Make sure that, in any case, this fee does not exceed 5% of the loan.
Usually, lenders will give you as much time as you want to make a decision on taking the loan. However, scammers or fake money lenders may offer you a “limited time” discount, and try to rush you into a decision. If your money lender puts you on the clock and forces you to make a decision in a very short time, chances are high that they might not be a legitimate business. Make sure you avoid all such businesses when obtaining a loan, as these moneylender traits are red flags for scammers.