7 ways to spot a loan scam

It’s never a great experience to get ripped off your hard-earned money

In this article, we’ll discuss 7 ways you can spot a loan scam

Check them out

One of the many ways to spot a loan scam is through the “Guaranteed approval” claim. The lender would try to assure you that you have a high chance of being approved for a loan. You might even be honest with them and say you don’t meet all the requirements but they’d tell you that you would be approved. It’s giving sketchy!

Fraudulent lenders aren’t interested in your creditworthiness. They tend to seek borrowers who are more likely to fall behind on loan payments which would lead to them having to pay high late payment fees and penalties. These types of lenders tend to make claims like “Everyone is approved!”. Your best bet is to steer clear of them.

Lending is a regulated business and as such lenders are required to be licensed to give loans. Our friends at Lendsqr have done an amazing job of explaining the different licenses a lender could hold before they give out loans.

Loan scammers usually don’t have licenses so you can easily spot one when you check the lender’s website to verify the list of states where it can legally conduct business.

Some scammers have been known to demand debit cards or sensitive banking information from borrowers. They claim they need the information for insurance, collateral or fees. Legitimate lenders may charge a fee for your application, but those charges are deducted from your loan. Any lender who demands an upfront payment in exchange for loan approval is most likely up to no good. Remember, an upfront payment (illegal) differs from a processing fee (legal).

When a prospective lender gives you an ultimatum or a deadline to apply for a loan with them, with a warning of “offer expires soon”. There’s a possibility such a lender is either hiding something or It may be a ploy to get you to make a rash decision without having time to do your research to uncover the scam they’re running. Shine your eyes o!

There are scammers out there with active and running websites in hopes of seeming legitimate, and they use these unsecured websites to steal sensitive information by using a malware bug. It works just like any other loan website and sometimes can be tricky to uncover unsecured websites, but here’s a helpful clue - Unsecured websites usually begin with “HTTP” instead of “HTTPS”.

Most predatory lenders will avoid posting their fees on their websites or disclosing them when asked. They may also tell you that you’ve been approved for a loan and then demand a fee from you upfront. While some reputable lenders do not list their fees on their websites, fees should be disclosed during the application process and before you sign anything.

Hidden fees that are imposed after loan approval are a huge red flag!

The reality of this situation is that if a loan offer sounds too good to be true, it probably is. Legitimate lenders won’t just call you out of the blue with an irresistible loan offer. You likely won’t qualify for a loan with an unbelievably low rate or a bad credit history. As always, remember that a lender who’s unafraid to lose their money is definitely one to steer clear off!

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Now that you know how to spot and avoid loan scams, it’s a good time to send us a message at support@irorun.com and let’s get you started on taking your first loan!