Amid the looming financial uncertainties in recent times, millions of people lost jobs, and many small and medium enterprises had to shut down. It created an unprecedented demand for cash among people to help ends meet.
Seeking an instant personal loan sounds like a great decision when there is a cash requirement at short notice. However, people fall prey to scams during such desperate times. Instead of receiving financial help, they end up losing more cash.
COVID-19 crisis has become a vital means of getting people scammed online. Online scammers use the internet to cheat people by offering instant personal loans with no income proof, low credit scores, zero interest rates, and instant disbursals. Unfortunately, some people fall prey to such scams.
However, there are ways you can detect the ingenuity of such instant personal loan offers. They have certain questionable features like advance payments, no stipulated eligibility criteria, and guaranteed approvals. As the number of scammers is growing everything, it is of paramount importance to create awareness among borrowers in the market.
Here are some of the tips to help you detect a fraud
No credit history requirement
Genuine lenders always request your credit report before approving an instant personal loan. Credit history is one of the criteria to ascertain your payment capacity. It includes whether you paid your credit bills on time or defaulted in payments. It allows the lenders to ensure that they can be trusted and will be conscientious about loan repayment.
So, if a lender promises loan approval without credit history or credit score check, be wary because that can potentially be a fraud.
Not interested in timely repayment
Instant personal loan scamsters do not show much interest in the timely payment of the loan amount. They target high-risk-debtors who are desperate and are not willing to investigate the lender, and hence made ludicrous promises such as you can pay only once in a year, or once in 3 months, and so on. Hence, you must remember that your repayment capacity is crucial in getting a personal loan from a reliable lender.
Ask for Money Upfront and Pressure you with deadlines
It is common among scammers that don’t require any personal loan documents, or show very little interest in the same. They are more interested in getting you to pay a “processing fee”, or a “service fee” or a “down-payment” on the interest amount via PayTM or bank transfer to some account number. They tend to pressure you to act immediately by putting a deadline. If you hesitate and ask for proof to show that they represent genuine lenders, they get aggressive, sarcastic, and sometimes even abusive. These kinds of lenders are not genuine, and it is your responsibility as a borrower to not fall for the urgency as most legitimate lenders allow you to take your time and then decide.
Run a security check of the loan provider’s website
It is easy to create a hoax website that looks professional these days. However, while filling the application or making any payment, look for padlock symbols on the lender’s website pages. Do not provide your personal information unless you see an ‘HTTPS://’ website. These websites are safe and secure, and the site is protected from identity thieves whose job is to steal your data and sell them to other cybercriminals.
A reliable and genuine instant personal loan provider takes pride in protecting your information so that no loan scams should target you. Reliable lenders may charge a loan processing fee, usually 0% to 6% of the loan amount requested. But this amount is usually deducted from the loan amount and the remaining amount is transferred to your bank account only after your loan has been approved. Most genuine lenders never ask for money upfront.
No physical address
Ensure that the loan provider you are interested in has a physical office location. Even if you are provided one, it is your job, as a borrower, to cross-check and confirm before providing your personal information. These loan scammers avoid meeting the borrowers and are always invisible to remain protected from legal consequences.
Promises of No Income Proof required
If an app or a website or someone claiming to be a loan agent promises you of “guaranteed approvals” with no income proof required, beware. Income proof is a mandatory document for any kind of loan, since lenders need to be sure of the applicant’s repayment capacity. This is also a regulatory requirement.
Avoid unknown emails or calls.
These days email phishing, an illegal practice, is often used to obtain sensitive information from people. Scammers also call people, posing as representatives of a well-known financial institution, and then trick them into disclosing formation such as credit card number and security code.
One of the best ways to avoid being cheated by scammers is by avoiding emails and calls from unknown people. Also, never click on the links or open the documents they send.
Warning signs that are important to identify loan scams
- Emails and text messages that have grammatical mistakes such as incorrect spelling, punctuations, and capitalizations.
- Promises of “guaranteed approval”
- No credit check required / promise to lend even if credit score is poor
- The lender asks you to transfer money before disbursing an instant personal loan to some unknown bank account or phone number via PayTM / Google Pay, or seeks very sensitive details such as credit card or UPI PIN early on in the loan application.
- The interest rate is ridiculously low, and there is no requirement for standard personal loan documents.
- If a tax or membership fee is involved.
- The lender pushes you to make quick decisions.
Keeping the tips and warning signs shared above in mind will always help you avert financial disasters and stay protected from various online and offline loan frauds. An online personal loan from Fullerton India is highly recommended due to its long standing presence in the market since 2007, and transparent application and loan approval processes.