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.