These days, it can be challenging to know what’s legitimate and what’s not. With so many Loan scams spread across the industry, how can you spot one before you become a victim?
Most people get a loan to open up new opportunities for themselves. Others do it to get out of hot water, most probably due to debt. Whatever the reason may be for getting a loan, no one deserves to get scammed. So, if you are planning to get a loan one of these days, here’s how you can tell if a lending company is a scammer:
1. No credit checks
Licensed loan providers or money lenders in Singapore and other countries usually look at your credit standing, your current income, payment history, and other financial aspects in your record. They do this to protect themselves from high-risk borrowers while determining the terms of your loan. If a lender doesn’t pay attention to your financial background, they are most likely seeking out high-risk borrowers who are more likely to fall behind on payments and get charged with exorbitant fees.
2. A prepaid debit card is required
A potential scammer will require you to give them a prepaid debit card for “collateral and insurance.” However, this only serves as virtually untraceable money that they can steal from you. Unfortunately, when this happens, you will have a hard time getting it back since you voluntarily handed it over to the unscrupulous “lender.”
3. The lender reaches out to you
Most legal lenders typically advertise in the traditional way e.g., online and print ads, etc. They don’t call you, send you unsolicited mails, or knock on your door. When you encounter this, be wary. It’s most likely a scammer trying to get your money.
4. No physical address
A legitimate lender can and will provide you with a physical address of their office, while a scammer will have trouble providing this detail to you. Some scammers will give you an address, but they will lead to vacant lots or completely different establishments. Avoid lenders that don’t have a legitimate and traceable address. As much as possible, only deal with lenders whose offices you’ve already visited.
5. Grammar errors and misspellings
Legitimate establishments rarely send out emails or letters that have grammatical errors on them. They have the staff to compose and proofread those materials. As for a scammer, they usually make the emails themselves, and most of the time, they don’t have enough grammar and language skills to come up with a legitimate-looking email.
6. Approval guarantee
If a lender guarantees that your application will be approved, be on guard. Legal lenders don’t do this because they cannot ensure your approval. Scammers use this as a technique to entice you to apply.
7. Pressure to act immediately
Avoid lenders that pressure you to act immediately, saying things like their offer will expire soon and you have to take out the loan by a specific date. A loan is a significant financial responsibility, and a legit lender shouldn’t pressure you to do it.
With so many scams nowadays, it’s crucial that you stay on guard when dealing with any financial transaction. It’s always best to protect your finances and your future.
Hassan is a Technician in mobile software programming, Internet technology and Electrical Installations. He also specialises in renewable and green energy solutions like Solar and Wind Power Systems.