Imposter scams are considered as the primary culprit behind fraud loss. These are the scams involving people who pretend to be someone they are not with the ultimate goal of getting your money. There are loan scams that fall to this category.
Loan scams are actions meant to get your money without giving you a good service in exchange. This can include those fake loans where you are required to pay upfront without getting the funds for the loan in return. However, the term loan scams could also be used to refer to loan schemes that will try to lure you into a kind of financing that will not make you gain anything, typically through fraudulent ways. Keep reading to get Tips for Identifying and Avoiding Loan Scams.
It is not easy to come up with a complete list of the different loan scams, partly because fraudsters constantly come up with new ones. But to help you identify loan scams, there are a few signs you should watch out for:
Legit lenders always use secure websites. Make sure that the website URL starts with HTTPS. Be extra cautious if it is only HTTP and avoid entering any personal information here.
Although most credit cards and loan companies that send legit unsolicited offers via mail, you have to be extra careful with how you react to them. Always work only with well-respected and known lenders at all times.
When it comes to loans, it is always a red flag if you are required to pay a fee upfront. If lenders ask you to pay a processing fee or application fee upfront, it is best to run away as soon as possible.
Some lenders don’t go through your credit history yet they base loans on the collateral or income you have. However, even in legitimate cases, it still pays to be wary and check the fine print. Read this article about three main types of credit.
Below are a few tips to remember to ensure that you don’t become a victim of loan scams: