The personal loan market has significantly contributed to the credit industry’s expansion. Leading fintech companies are also making a significant contribution, notwithstanding the market share that banks and other traditional lenders have achieved.
However, there have also been more personal loan frauds as a result of the boom in online lenders, particularly during the pandemic. As a result, numerous examples of fraudulent loan applications defrauding honest borrowers have occurred. Therefore, you must understand how to recognise a phoney loan application and select the appropriate one!
Here are a few ways to spot personal loan scams.
#1. No registered address or website
Another way to spot a fake loan application or personal loan fraud is to verify if the lender has a website. If they don’t, it can be because they are either unverified or not in compliance with the law. Websites give you insight into the business and its operations in addition to information about the goods and services they offer. More significantly, you must determine whether the website is secure.
Loan scammers also frequently maintain their anonymity to avoid legal implications for their acts. Due to this, they usually don’t have a website or a registered location. It’s time to avoid a lender if they lack these essential pieces of information. Go for personal loan providers such as LazyPay who have a good reputation in the society and a strong presence in the digital world ranging from apps, websites and social media handles.
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#2. Demanding payment in advance
It is quite likely that your lender is trying to contact you if they request advance payment in cash or to be transferred to them before your loan has been approved under the guise of processing or document verification. Yes, such a fee is typically necessary, but trustworthy banks never request it only based on a verbal agreement and always make sure to disclose it in the loan agreement.
#3. Unusual ways of communicating
The majority of well-known banks and lenders use television and print advertisements to promote their loan programmes. They wouldn’t frequently knock on your door or make a cold call to you to ask if you needed a personal loan. If this occurs, it is almost certainly a hoax.
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#4. Time-sensitive offers or applications
It may be a loan scam if a lender tempts you with tempting Personal Loan offers and pressures you to apply quickly before the offer expires. Unfortunately, this is a tried-and-true method that scammers use to make sure you don’t have time to check out their past.
#5. Suspicious websites and emails
When receiving emails from lenders while communicating, stay alert at all times. It can be a scam if the email has grammatical errors or if the writing style doesn’t seem appropriate. Checking the email address of the sender is also a good idea. It must have a suitable domain name, such as the one of LazyPay, not some weird combination of letters or numbers.
#6. Common loan fraud schemes
The majority of loan scams either try to get money upfront or have extremely strict loan terms so that consumers have to pay late penalties or other expenses. Popular examples include:
- Loan fee scams: Swindlers may attempt to convince you to pay hundreds or thousands of rupees in upfront fees in exchange for a low-cost loan. They will cut off communication after receiving these fees without returning any money.
- No credit check scam: When qualifying you for a loan, several reputable personal loan companies look at more than just your credit score. This is troubling because your credit history plays a significant role in evaluating how risky a borrower you are.
- Scam of debt consolidation: By consolidating your debts, you can simplify the repayment process and ultimately save money. A debt consolidation company is likely trying to defraud you if it is pushy or advises you to stop communicating with your creditors.
Final Thoughts
Customers have a diverse range of options because there are so many lenders available at the moment. Unfortunately, not all of them are sincere. Numerous fraudulent loan applications have led to scams and harassment of borrowers.
Thankfully, there are a few quick techniques to spot illegal software. Always do your homework before choosing the best app for you. LazyPay is one such loan app that can help you get personal loans conveniently.
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