The lending industry is growing continuously. As more borrowers take out personal loans, people naturally are looking for financing institutions that could answer their pressing financing needs.
There are many legitimate banks and alternative financing companies within the lending industry. Unfortunately, there are also a lot of personal loan scams as well.
Become a happy borrower by learning to spot genuine lenders as well as con artists with loan fraud schemes. Here are tips to avoid personal loan scams.
Check if the company is interested in your credit history
Although there are companies that lend you money despite your bad credit history, credible lenders still want to get some assurance that you can repay your loan. That’s why NSW Mortgage Corp has a borrowing power calculator to assess your borrowing power and a loan repayment calculator to check how soon you can pay it off.
Stay away from unregistered lenders
In Australia, lenders are required to register before they do business. Check if the financing company is registered before you give away your vital personal information.
If the lenders’ website does not disclose their Credit License or ABN or the address where it legally does business and if they are not registered in the places where they operate, you are most likely dealing with a scammer. Legitimate lenders disclose their business information and/or location and contact information, so their customers can have peace of mind about the legitimacy of their business and easily communicate with them.
Never pay money up front in order to obtain a loan
A legitimate lender knows that you need money so they will not ask you to pay upfront fees prior to depositing the loan. Scammers may ask you to provide a prepaid debit card for collateral. While legitimate lenders often charge a fee for your loan application, they are usually deducted from your personal loan.
Ask about the method of repayment
A legitimate lender will never ask you to wire money or pay an individual directly. Wire transfer is extremely difficult to trace, that’s why scammers use it to hide their transactions.
Pay attention to the security certificate of the webpage that requires you to enter personal details. If there is no padlock icon and there is a warning that the site’s security certificate has expired, back away. It means that it is an insecure website. Remember that legitimate lenders keep their website safe from hackers.
Personal loan scams are schemes to steal your money or your identity, or both. Do you often get an unsolicited email, phone call or text message or at times, a personal home visit from a questionable individual asking you to send money in advance or give the details of your debit card? Report them to the police especially if they are prompting you to respond quickly or to keep the offer a secret.
NSW Mortgage Corp has a registered Australian Credit License, with verifiable contact information, FAQ page and genuine testimonials from satisfied customers.