Are you thinking of getting a personal loan? Hopefully you have a high credit score, as this will give you a better chance of getting the loan through a legitimate company. But even if your credit is excellent, you need to be aware of the personal loan scams out there.
Not Respecting Your Limit
You don’t want to do business with a lender that pressures you into borrowing more than you can handle
You should never have to pay any fees for the application process. If you’re requested to do this, move on.
Pumped up Interest Rate
Know what the going interest rate is. A good lender will quote you near this average rate.
A bad lender will recognize the desperation of the applicant with bad credit and try to sock them with an abnormally high interest rate.
Us and Only Us
Be suspicious of lenders that don’t like the idea of you shopping around for better rates.
This is a red flag that they have questionable loan practices.
An honest, legitimate lender or bank has a verifiable physical address. Get this confirmed with Google maps.
If you can’t, move on. But know that even a predatory lender may have a very solid physical address.
As in ones you didn’t request. Watch out for banks that send you unsolicited invitations for a personal loan application.
Don’t Be Intimidated
Because a seedy outfit may want to scare you into closing on their loan. But they can’t do anything to you, even if they use the term “legal action.”
If you want to reject their loan offer, then do so.
Does the lender want your Social Security number? This is fine if they’re wanting to do a credit check.
If they’re not doing a credit check but want your SSN, move on.
Signing Empty Documents
Do not sign anything that does not have the interest rate, terms, loan amount, monthly payment and other crucial information.
Before signing anything, make sure there are no blank areas that can be filled in later.
Run if the lender wants you to sign something that’s missing information.
Is a bank guaranteeing your personal loan? Sounds great, right?
Not so fast. They cannot do this if they have not verified your financial history or credit history.