How to Avoid Installment Loan Scams
Find out whether a loan company is legitimate by looking at these tell-tale signs:
Advance Payment Loans: Legit loan companies promote transparent lending with all the rates and fees stated upfront. They do not demand any advance payment at the time of loan approval to guarantee your loan. Instead, they subtract the fees from the loan amount you obtain from them. Therefore, if you are asked to pay advance, then it is certainly a red flag. Do not get provoked by the advertisement that says assured loan approvals for good or bad credit. Upon submission of your requested loan information and supporting documents, you may get a call saying that the loan has been approved but processing fee is required to discharge the loan. In such a scenario, do not fool yourself by transferring the money for loan process. Moreover, since the scammer already knows your personal information and banking details, he may commit identity theft too.
Bogus Loan Agreement: The fraudsters may portray a loan agreement to trick you. They may also employ aggressive and persuasive tactics to rush you into signing the loan agreement. All these hint that you are dealing out with a loan trickster. Therefore, before signing on the dotted line, always make sure to read the fine print in the agreement carefully that detail out the installment loan terms and conditions. Besides, let a legal professional inspect the fine print given in the loan contract. Although the given agreement appear be a lookalike of legitimate agreement to you, the attorney can notice a fraud if it is a fake contract. Besides, a genuine lender will never object to a review by attorney.
Check the Loan Interest Rate: Never get foxed into paying off high interest rate than you have to. A responsible and legit lender will not charge interest rate beyond what the law allows. Many ravenous lending companies make you suppose that your chances of getting a loan approved are thin or nil because of your past financial instability or your poor credit history. However, this is not true. Several lenders in the market grant you a loan irrespective of your credit history or collateral.
Check with State Agencies: Law mandates it for any loan company or loan agent to register with the specific state agency, in order to do business within a particular state. Therefore, before you work with any lender or agent, get in touch with your state Attorney General’s Office, Financial Regulation or Department of Banking to make sure whether the lending company in question is registered. This will facilitate in straining out the scammers, largely.
Do your Research: Perform a thorough research by the lending company’s name before applying for a loan or divulging your banking information to any lender. You can search your local Better Business Bureaus (BBB) database by the loan company’s name, website, email, postal code or contact number. However, having a registration will not vouch for a good lending service.