How Students Can Avoid Personal Loan Scams

“No money down? No problem. Bad Credit? Don’t worry about it. We guarantee that your loan will be approved.”

Wow! That sounds like a borrower’s dream come true. What student doesn’t need a little extra cash to get them through the semester? The truth is that if it sounds too good to be true, it usually isn’t true. And the promises made to you through offers like the one made above are usually scams that can leave you with an empty bank account and a stolen identity.

But, before you lapse into a full-blown panic attack, there is good news. You can protect yourself from scammers, swindlers, and other unsavory sorts by knowing what to look for and keeping your peepers peeled.

How Students Can Avoid Personal Loan Scams

Unfortunately, scammers don’t hold big amber signs.

Personal loan scammers prey upon the financially strapped–including struggling students–promising to be the panacea for all of their financial problems. In exchange for providing them with your personal data–and, oftentimes a service fee–they will ensure that your loan is approved. No matter how bad your credit is. But the loan money never arrives. And the lender is nowhere to be found. You are not only out the initial fee, but your social security number and banking information are now in the hands of crooks. Lovely.

Big Loan Promises

If a prospective lender promises you–someone who is a complete stranger–that they can “guarantee” approval of your loan no matter how dreadful your credit may be, they are lying. A reputable lender will, at the very least, need to verify that the information you have provided on your loan application is truthful. Plus, as “Loan Scams: Internet Loan Scams and How to Avoid Them” states, no lender can guarantee a loan without first checking the customer’s credit buy levitra viagra cialis and, if they promise otherwise, that should be a huge red flag.

Money for Money

A bona fide lender would never ask you to give them money upfront to process a loan–no matter how bad your credit may be. Scammers have been known to give this “fee” a variety of legitimate-sounding names like a “processing fee,” an “insurance fee,” a “first installment,” or even “collateral,” but no matter what they call it, their intent is to deceive you.

“Loan Scams: What to Look Out for” warns that statements like “Insurance is needed to cover the loan”; “You need to pay the first installment on the borrowing to activate the loan”; or “We need this money to pay someone to set up the loan” are all prime examples of scams.

No Fixed Address

If your lender cannot provide you with an actual street address for a brick and mortar office, run the other way. Quickly. If they do give you an address, don’t accept this information at face value. Visit Google Maps and check that the street address is an actual office and not a vacant lot or home. Also, do a Google Search on the company name including words like “fraud” and “scam” to see what turns up. And don’t forget to check with your local Better Business Bureau. “How to Detect and Avoid Personal Loan Scams” also advises against dealing with any company that uses a PO Box. Remember, if your gut is telling you something isn’t right, you should listen to it.

And be especially leery of lenders that come to you, particularly through your e-mail, social media accounts, or your telephone. This is not how reputable bankers tend to do business.

Have you been the victim of a personal loan scam?

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I am a freelance writer, avid blogger, illustrator, and aspiring novelist who thinks the world is a terribly funny place filled with bizarre things to observe--and, of course, comment on. You can follow her somewhat neurotic and OCD ramblings at The Embiggens Project and at Searching for Barry Weiss.

One Response to “How Students Can Avoid Personal Loan Scams”

  1. Alva

    Feb 16. 2017

    Really enjoyed this post.Thanks Again. Really Cool.

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