Here’s how to avoid a personal loan company scam

Do not be deceived. Watch out for these red flags and protect yourself. ((iStock)

It is an unfortunate fact that most people interact with at least one scammer when filing financial documents for various types of loans, such as: B. Student Loans or Home Loans. When you are looking for a personal loan to cover costs, this type of scam can be especially painful.

While there are an abundance of personal loan scam companies, there are many reputable personal loan companies willing and able to help you raise the funds you need. You need to watch out for some red flags when looking for a loan.

HOW TO FIND THE BEST PERSONAL LOAN FOR YOUR NEEDS

Spending a little more time researching prospective lenders and brushing up on loan fraud warning signs can save you a lot of heartache. You can safely explore your personal credit options by visiting Credible to compare interest rates and lenders.

How to Check Out a Personal Loan Company

During your search for a personal loan company, there are a few things you can do to check that the loan company is legitimate.

1. Read the website carefully: Make sure the lender is registered to offer credit in your state. Check out the misspellings and awkward grammar. While many scam websites look better when it comes to looking legit, it's often easy to spot a scam website by carefully looking at the syntax.

2. Look for reviews of the company: Search Google for reviews and rate the company's online presence. Find the lender's name using "Customer Reviews". Other people may have been defrauded by the same company. It's also a helpful way to use customer experience to determine which recognized companies you might want to work with. You can also visit the Better Business Bureau for detailed information on lenders.

If you're looking for the best personal loan interest rates, head over to Credible to view your options. You can view the interest rates of multiple lenders and get an overview of each company.

WHAT TO DO BEFORE APPLYING FOR A PERSONAL LOAN?

3. Check the company's registration: Lenders must register in every state in which they operate. Look for the company name and "License". You can also use your state's website to check a company's license status.

How do you know if you are being scammed?

There are some common red flags to look for when it comes to a loan scammer.

1. Guaranteed approval: Reputable lenders always check whether you have bad credit. If the lender offers a loan agreement without a credit check or if you have bad credit, either you are being scammed or the company is offering payday loans, the interest rates of which can exceed 100%.

2. Unwanted texts or phone calls: If you receive text with a link asking you to fill in your information so that you can receive money, it could be a warning sign. Delete the message and continue. You should also ignore phone calls from companies that promise cash or lending unless you are familiar with the lender and have given them your information.

3. Check your email: When you receive an email from a credit company, check their return email address. Anything from Gmail, Hotmail, Yahoo, or any other major email company should be viewed as warning signs of personal loan fraud.

4. Beware of phishing scams: To do this, you often have to click on a link and enter personal information. These often look very real, but are just one way of gathering your personal financial information.

5. You deposit money into your account and ask to send it back to release your loan: A common scam is when a "lender" says they need to send you some money to verify your bank account. This is never how a legitimate lender works.

Looking For Cheap Loans? Visit Credible to use the personal loan calculator and find the best personal loan interest rates.

16 OF THE BEST PERSONAL LOANS IN 2021

What to do if you are scammed by a credit company

If you fall victim to a fraud company, you have several options. First, contact your bank and any other accounts that the scammer may have accessed. Ask the bank to freeze your account and send you new cards. You may also be able to dispute fees and have the money refunded.

Second, contact the credit bureaus - Equifax, Experian, and TransUnion - and have your accounts frozen. A freeze prevents new loans or credit cards from being approved. This can create problems when you need a personal loan. However, it is an effective way to protect your funds until you are ready to unblock the account. Freezing won't affect checking accounts or damage your credit score. Alternatively, you can add a fraud notification to your account so that you will be notified every time someone accesses your credit information.

Third, report the fraudulent company to the FTC. This helps them track down scammers and protects other potential victims. Don't forget to change the passwords for your bank accounts, social media accounts, and emails.

When looking for legitimate lending companies, take the right precautions and make sure you don't fall for a scam. There are numerous online lender and loan company screening strategies out there, as well as steps you can take to help mitigate the impact and avoid potentially losing more money, falling victim to identity theft, or worse.

You can make sure you are using a legitimate company and not browsing credit fraud cases by using an online marketplace like Credible to explore your personal credit options. Take the time to research lenders before providing any personal information. This is the best way to protect yourself.

DO THESE 5 THINGS BEFORE BORROWING A PERSONAL LOAN

Do you have a finance-related question but don't know who to ask? Email the expert for credible money below moneyexpert@credible.com and your question could be answered by Credible in our Money Expert column.

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