Personal Loan Frauds - How To Avoid?

A personal loan may be an extremely helpful thing if you know how to use it. People may even use personal loans to consolidate their debts or bad credits. These sums are also available to grant access to quick cash in emerging situations. All these benefits make quick cash a good target for scammers. In accordance with the Federal Trade Commission, $1 trillion was lost because of scams only during 2017. In order to stay away from personal loan frauds or online loan scams during the lending process, you should be equipped with valuable information. 

What are Personal Loan Scams?

Personal loan scams are false loan deals that collect personal data and charge fees and collateral from customers. In reality, such folks have no intention of providing any money. They quickly vanish after obtaining the necessary info and money. To begin with, a personal loan scam is a method for criminals to gain your Social Security number. 

Generally, scammers try to take advantage of a person who is in need of money. First and foremost, the scammers request to pay fees in order to provide the loan. They may call it an origination fee or even an insurance fee. After the borrower pays the fees, lenders vanish. Be aware that advance fees are illegal and no legitimate lender is entitled to require money for borrowing your credit. However, loan fraudsters may also use your personal information such as your name, date of birth, and social security number in order to gain financial profit. This kind of scam may cause heavier damage to your reputation. Fortunately, while many loan scams are similar, there are several features to check for—and avoid a loan scammer when looking for a real personal loan. We are living in a virtual era and it is important to keep your personal data protected.

No Credit Check Required

In traditional lending, the credit history and additional financial information are basically required in order to understand the creditworthiness of the borrower. If the lender does not request you to provide proof of your credibility or other financial information it must alert you about an illegitimate lender. Scammers are not interested in your creditworthiness because they only need your funds. First and foremost, each borrower must read the requirements provided by the lender. Sometimes people with bad credit ratings try to get quick cash, by all means, however, remember that a bad rating does not mean that you should be a potential victim of scammers. Moreover, for people with bad credit, payday loans may be available when they are in need of quick cash. Payday loans are available online at shinyloans.com. Bear in mind, that shinyloans.com is not a lender of funds, alternatively, it acts only as a platform for connecting lenders and borrowers. If you need to cover your financial crisis, firstly you should fill out an online application in order to get your quick cash from third-party lenders.

Upfront Fees

The usual key indicator of scamming is when you are requested to pay upfront fees for guaranteed approval. No one can guarantee approval before checking your credit history and other related financial information. If you notice that the lender hints at the payment of fees in exchange for his approval, run away from them. 

The second red flag that you can notice is the payment method of upfront fees. If the lender wants payment of fees in cash and, by all means, attempts to avoid payments by credit card or personal check, you must be extremely cautious.

The Lender is not Registered in your State

Based on US regulations lenders must have a registered license in the exact state where they run their business. When you are trying to clarify the legitimacy of lenders, pay close attention to the list of states where the company is entailed to run a business. If your state is not included in the list, but the lender is still available to provide lending services, be aware, it may be a scammer. For being a hundred percent confident firstly check the lender’s license at the local attorney’s office.

Sense of Urgency

Psychologists tend to believe that urgency is one of the best tools to manipulate a person. All scammers know these techniques, and they try to create urgency and mislead borrowers.  The most common manipulation strategy looks like special offers that allegedly expire. None of the legitimate lenders will repress you to make decisions instantly.

How to Check if a Loan Company is Legitimate

Remember, no one will provide you with a list of fake loan companies. You should only be careful and find frauds yourself. According to the Federal Trade Commission, Americans lost over $3.3 billion in 2020 as a result of fraudulent operations. If you're searching for a personal loan, here are a few aspects to consider before sharing your private information with anyone:

Customer Reviews

If you're not sure about a lender, one of the simplest ways to check the quality of any service is to read customer reviews and seek any negative comments. If the platform has no customer reviews or the comments appear to have been authored by the same user, this might be a warning indicator to stay away.

Secure Website

Check the name of the link in your browser's URL bar and make sure it begins with "HTTPS" rather than "HTTP." HTTPS (Hypertext Transfer Protocol Secure) is designed to ensure the safety and confidentiality of the information transmitted over the Internet.

Contact Details

Remember, contact details should be listed on the website you are working with. It should include a phone number, and email address, and a legal physical location that can be easily verified using Google Maps. Stay away from the platform if there is no contact information listed on the website.

Lock Icon

Take a glance at a lock icon near the location box to the left of the page URL in your browser. You can immediately determine whether the connection is encrypted or not. If the website is not secure, a padlock with a warning triangle or a padlock with a red strike over it will appear. This should assist you in avoiding scams.

How to Get a Loan with Shinyloans

Shinyloans simplified and facilitated the process of getting quick cash. Furthermore, we ascertain that you are dealing with a trustworthy platform that protects your personal information. As previously said, the first step is to complete an online application form and disclose some personal information. The completed request form should then be sent to the platform so that it can be shared with the network of third-party lenders. Lenders in Shinyloans are often very quick to make a decision and make it within minutes. If approved, the client receives the notification of further collaboration and is requested to sign an agreement. 

Borrowers are strongly advised to review the agreement and discuss all the issues. In the event of confusion, the lender should properly explain the entire procedure to the borrower, so that the latter can avoid future concerns. If the borrower has learned everything and the lender has no more queries, money is transferred immediately into the borrower's bank account. The cash is normally available to the client within a few hours.