A personal loan scam is a way for fraudsters to obtain your Social Security number or collect fees without lending you any actual money. Recently there have been a lot of these personal loan scams circulating and we wanted to share the key red flags to look out for in case you come across one of these scams.
1. The Lender Contacts You Directly
For the most part, you won’t get unsolicited calls from lenders unless you recently applied for a loan and are receiving prescreened calls based on your credit history. If you do receive an unsolicited call, it is most likely a personal loan scammer.
2. You Feel Pressured Into a Loan
When shopping for a personal loan, you should keep an eye out for offers that expire within a short period of time or loans with otherwise urgent application requirements.
Reputable lenders usually have consistent loan offerings that are based on factors such as creditworthiness and current personal loan rates.
3. The Lender Guarantees Loan Approval
If a lender is guaranteeing loan approval without borrower qualifications (borrower’s credit history, employment and income and debt-to-income ratio), it is most likely a scam as a way to hook borrowers.
4. The Loan Doesn’t Require a Credit Check
Another sign of a scam is if the lender claims that they don’t require a credit check. Every personal loan needs a credit check to analyze the risk the lender will be taking on. For that reason, if a lender does not run a credit check as part of your loan application process, it’s probably a sign of a personal loans scam. A fraudster has no intention of giving you the money, so they don’t care what your credit is like.
5. The Lender Won’t Disclose its Fees
Personal loan fraudsters often are intentionally vague about fees and will spring them on the borrower after loan approval in an effort to pressure the person into signing.
Legitimate lenders on the other hand typically post applicable fees on their websites and are transparent about loan costs during the application process.
If you would like to see the additional five signs to look out for, click here.
As we work together to get through these ever-changing times, let us know how we can help! We have personal loan options available to help you with your needs. Please give us a call at 800-835-3400 to speak with one of our Member Advisors, or visit us online at caminofcu.org for more information. We are here to help you on your financial journey.