7 signs to understand Personal Loan scams

Looking for a Personal Loan? Be wary of these signs that may protect you from loan scams.

A Personal Loan can be quite handy when you’re looking for some quick cash in cases of emergency, or even for non-emergencies like home renovation or marriage. These days, you can easily apply for Personal Loans online because they are convenient and get quick approvals. However, a Personal Loan is also one of the most common ways for fraudulent lenders to trap you in their loan scams. Here are seven warning signs of Personal Loan scams that you should look out for:

No credit check required

All legitimate lenders and reputed banks will thoroughly scrutinize your credit score, Income Tax (IT) returns and previous loan payments before giving the go ahead for your Personal Loan. If a lender specifies that there will be no credit check required, or approves your loan too easily without asking for your previous financial papers, then you may be dealing with a scam. Stay away from such lenders.

Asking for an advance fee

If your lender asks for an advance fee in the name of processing or document verification, in cash or to be transferred to them even before your loan is approved, then it is highly likely that they may be scamming you. Yes, such a fee is usually required but legitimate banks mention this in the loan agreement and never ask for it just on the basis of a verbal agreement.

Odd means of communication

Most reputed banks and lenders advertise their loan schemes via print ads in newspapers and on television. They would seldom cold call you or come knocking on your door asking whether you require a Personal Loan. If this happens, then it is most likely a scam.

No physical address

If a money lender only insists on coming to your home to discuss the loan details and does not have a physical address, then beware, it might be a loan scam.

Limited time offers or urgent applications

If a lender entices you with lucrative Personal Loan offers and presses you to apply within a time limit or the offer might expire, then it might very well be a loan scam. This is a well-known technique used by scamsters to make sure that you have no time to do a background check on them.

Fishy e-mails and website

Always be alert when reading e-mails from money lenders during your communications. If there are grammatical mistakes in the e-mail, or if the content doesn’t feel professionally written, then it might be a scam. It is also a good idea to check the sender e-mail address. It should have a proper domain name for example ‘<loans@icici.com>’ and shouldn’t have any obscure names or characters.

Unsecure website

When you visit the lender website, it should have a padlock symbol next to the website address wherever your personal bank details are required. This ensures that the page is secure and no one can steal your data. If the padlock is not present, it is likely that the lender is scamming you.

Thus, keep in mind these seven warning signs that can protect you from Personal Loan scams and always approach reputed companies for your financial needs.

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