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When money is an issue, and you need funds to expand your business, pay your debts, or buy equipment, anyone offering cash looks attractive. Unfortunately, some loan provider websites are not legitimate, while others like, Fast Capital 360, are valid businesses. But in today’s internet-focused world, the number of scammers continues to increase. These defrauders take advantage of people and rip them off by getting access to their personal information and money. If you don’t want to be the next victim, be aware of anything that seems too good to be true. Stay alert of unwelcome phone calls, emails, mails, or advertisements. Be very careful with who you are sharing your financial information with.
Here are a few red flags that can help you identify a scam lender.
They Ask for Upfront Fees
Legitimate lenders never ask for fees before you apply for a loan, or before it has been approved. Most lenders charge fees from the money you are borrowing, and do not guarantee loan approval in exchange of fees. So, if a lender asks for upfront fees in order to secure a loan, then know he or she is a scammer.
They do not Require a Credit Check or Business Plan
The first thing an authentic lender looks at in your loan application is your credit history. If you do not have a good credit score, then you do not qualify for the loan. The same goes for business plans; the lender looks at a company’s capital and their capacity to make sure they can pay back the loan in time. If a lender is not interested in your credit score or your business plan, then immediately run away from them. It is the first visible red flag, who does not care about your credit, but only wants your personal and financial information. Most entrepreneurs have a poor credit history making these offers that don’t require credit checks attractive. Fortunately, there are legal programs that offer short-term loans to individuals with a poor credit history. So, make sure the person you are dealing with is doing things legally and not just ripping you off.
The Lender is not Registered in Your State
Every state requires lenders to register and have a license, so sure your loan provider is registered in your state. Even if they show you an out-of-state license, it is advised that you not respond to their lending inspection. There is a significant number of fraudulent online businesses that offer loans while operating without a license.
They do not have an Address or Phone on their Website
A scammer would never list accurate contact information like an address or a phone number, so you have no way of following up with them. Many even provide domestic addresses, but that does not offer a guarantee of the lender being authentic. So, if you come across such websites where there is no valid registered address or number, know that it is not right.
If it says ‘Your offer expires soon, you must act now’
If you come across an offer that requires immediate action, then the chances are 99.9% that it is a scam. These scammers want to use high-pressure techniques, so applicants react quickly and do not have the time to spot their scam. Authentic lenders take your process smoothly and don’t make you rush into things.
They Guarantee Approval
There is no such thing as guaranteed loan approval. A legitimate lender first verifies your personal and financial information and checks your credit history, and then moves forward with your loan application. If you find a lender that is giving you a guaranteed approval, then they are a fraud, who’s only trying to take money from you.
They take Payments in Form of Gift Cards
Paying someone with a gift card means that once the money has been used, there is no way of tracing it back. That is why scammers often use this technique and say that they accept gift cards in the form of payments. An authentic lender would never do such a thing, so if you come across someone who’s asking for a gift card payment, know they are scamming you.
These are some of the red flags that are most common among loan scammers, be wary of them and keep yourself protected. We have listed down a few things that you can and must do to keep yourself secured from such scamming issues.
Always Research the Lender
When you get in contact with a prospective lender, research and conduct background checks on them to know how authentic he or she is. Check for their customer reviews, ratings, and complaint history. Go online and research and see if you find anything about them or the company you are dealing with. Get in touch with other business owners who might have worked with the same lender. Visit their website, social media platforms, and check how legit their contact information is.
Check for Clear Loan Terms
Lenders follow a straightforward loan procedure and highlight all the necessary items to complete your application. These include the loan amount, interest fees, final cost of your loan, and any possible penalty fees. A legit lender will give you all the details about your loan and payment options. Look online or ask around what all things are stated in an authentic loan form. If you do not find all those terms in a loan form offered by your lender, then do not sign it.
Make sure there are No Upfront Fees
Legitimate lenders never take fees prior to approving a loan. Nor do they deduct any amount from your loan amount without informing you. So, if a lender asks for upfront fees before your loan application is approved, know they are a scammer.
Always Read the Fine Print
Before you sign any contract or submit anything online, make sure you read all the terms and conditions stated. Because once you have signed the document, it will be very difficult for you to step away from it. Read about the amount of loan you’ll be getting, the fees you’ll be paying, the interest rate, total repayment amount, and final cost.
Keep your Personal and Business Information Secure
Unless you are entirely familiar with the lender, never share your business or personal financial information. Not over the phone, not over the internet, you cannot trust anyone with such delicate info.
Monitor your Banking Accounts Carefully
Once a scammer gets hold of your financial information, they will try to make unauthorized withdrawals from your bank account. To stay safe, keep a close eye on your bank account and check your statements regularly. If you find something shady, inform the bank right away.
