How to Avoid Loan Scams

internet scam
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When you get an email or visit a website with an offer of a loan with a low or zero interest rate and no credit check, watch out. It is probably a scam. Legitimate lenders don't send random emails inviting people to borrow money at a very low interest rate or with no interest at all.

Tips for Avoiding Loan Scams

Many loan scammers will set up websites or provide articles and reviews that outline the loans they offer.

They will usually offer a quick and easy loan approval process, a very low interest rate and a guaranteed right to cancel. Bad credit isn't an issue. Scammers tell borrowers they can get a loan regardless of their credit history.

It might sound legitimate, but it probably isn't. The scammer is either out to get your money by charging you a fee upfront for the loan or wants to get your confidential information for identity theft.

Loan Scam Warning Signs

  • Email messages contain spelling, capitalization, punctuation and/or grammatical mistakes.
  • Borrowers are asked to transfer money before getting the loan.
  • There is a tax or fee required to get the loan.
  • The interest rate is far lower than any legitimate lender.
  • You are offered a free period (like a year with no payments) before you have to begin repayment.
  • The company says that they don't use credit checks and will lend out money regardless of financial problems of the past.
  • Borrowers are told that they need to make a decision quickly, or they will miss out.

Check Out the Lender

Ask the lender questions to check their legitimacy. Questions like the name of the company, its business address, licensing information and registration. If they ignore or avoid these questions, it is probably a scam.

Also Google the company name plus scam to see if there are reports of scams related to the lender.

Tips for Avoiding a Loan Scam

Never send your social security number, credit card or bank account details via email or enter or a website that you aren't sure is legitimate. The links contained in the email can also be fake, and it may not be obvious that you are being sent to a different website than the real company.

Most legitimate loans will not require an upfront payment. It is illegal for companies in the United States to promise a loan and ask for payment before its delivery. No legitimate lender will guarantee approval before you apply or have your credit status checked.

Loan Scam Examples

Here are examples of scams shared by readers:

Texas Loan Company
Texas Loan Company - be careful. Scam had a lot of emails for credit cards loans. All fake just wants money from you.

Emmediate Credit Solutions
They contact people who are looking for an FHA loan, and tell them they can help "repair" their credit. But instead, they get your credit card and they don't ever do a thing but take your money.

More Information on Job Scams

How to Avoid Scams
How to tell if a job is a scam, typical employment scams, work at home scams, and how to avoid scams.

How to Report a Scam
Have you been scammed or almost scammed? Here's information on how to report a scam, including where and how to report an employment scam.

Scam Warning Signs
What's a scam and what's not? It can be difficult to tell the difference between scams and legitimate job openings, especially when it comes to work at home jobs. Here are scam warning signs to watch for and how to spot a scam.

Related Articles: Credit Report Scams | Loans for Unemployed Workers | How to Avoid a Bad Credit Loan Scam