Although receiving unsolicited personal loan offers isn’t unusual, if someone promises guaranteed approval and asks you to send upfront fees or requires your bank information they could be trying to scam you. Contact your bank immediately in order to report any suspicious transactions that arise.
Legitimate lenders take your credit score into account when making their decision about your personal loan approval decision and do not charge upfront fees; rather, they typically deduct expenses from your loan amount itself.
1. High-Pressure Tactics
Personal loan scammers employ high-pressure tactics to coerce borrowers into making hasty decisions that could end up costing more money in the long run. For instance, they may tell borrowers their offer will only last for a limited time or refuse their credit application unless it is accepted immediately.
Scammers might ask borrowers to send payments using unorthodox channels like prepaid cards or Venmo; this should raise red flags because reputable lenders typically request payments through official channels like bank accounts or credit card companies.
Reputable lenders do not charge upfront processing or insurance premium fees when offering personal loans; any such costs should be included within the loan amount or detailed in its terms and conditions.
2. Unsecure Websites
As food, energy and mortgage costs continue to soar worldwide, criminals have exploited consumers by using predatory lending and advance fee scams to con them into giving money or personal information that may lead them down a slippery path towards personal loans.
Before applying for a personal loan, make sure the lender’s website supports HTTPS to protect sensitive data against data breaches or identity theft. Also look out for a padlock icon in your browser bar as further evidence that you’ve found a safe site.
If you find a website without HTTPS security, consider calling them and asking them to implement HTTPS as soon as possible. It will protect both digital security and search engine rankings since Google prioritizes sites which support HTTPS over those without it.
3. Lack of a Physical Address
Many personal loan scams involve fraudulent lenders promising loan forgiveness and other financial benefits in exchange for fees, often too good to be true promises which lead to identity theft or debt traps.
Physical addresses refer to specific geographic locations that are controlled and administered by an authoritative and administrative region that establishes regulations for land development, zoning, taxes, commercial mortgage guidelines and home mortgage guidelines, etc. By contrast, mailing addresses serve primarily as the source of mail delivery.
An address is essential when identifying legitimate lenders, with legit lenders typically listing their physical address on their website or state license. Any lack of physical address should raise red flags. In order to protect yourself further from scammers online it’s also wise to use an address validation API prior to making transactions online – this service will verify if an address is valid, deliverable and up-to-date.
4. Unlicensed Lenders
Personal loan scams can do significant damage to both your credit and bank accounts. They could even result in identity theft and financial fraud.
When lenders require upfront payments, it should raise alarm bells. This could include application fees, interest charges or any additional shady charges not mentioned in your loan agreement. When these fees must be paid via obscure payment channels such as gift cards, wire transfers or peer-to-peer platforms this should also serve as an indicator.
Legitimate lenders don’t require upfront payments and should disclose all associated fees on their website.
Scammers may create an air of urgency by telling you your loan offer will soon expire or that there’s only limited availability. Avoid lenders who create this kind of pressure, and verify their state license by searching their corporate address or consulting your local attorney general’s office – or by Googling both their name and state to find their license number.