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A personal loan can come in handy in terms of easing your financial stress, especially when you need money to help you pay off those important bills such as your car, medical bills, or you much needed holiday. However, there are opportunist who are also looking to take whatever money you might have and make a run for it. We have compiled seven tips on how to avoid being scammed when applying for a personal loan.
1. If they don’t ask for your credit history
Any financial lender will always want to check your credit history to see if you are financially suitable for a personal loan. They also want to ensure that you will be able to pay it off, instead of applying for something that will further deplete your finances. If your lender doesn’t inform you that they will be pulling out your credit history report over the phone, via email or on their site, then something is up.
2. If they ask for money
If you are applying for a personal loan, and they ask you to depart with your money to secure it is also another sign of dodgy trading. Accredited financial lenders will never ask you to provide a prepaid debit card for insurance, collateral or fees. By giving away your card will give them access to your personal details. Furthermore, they can disappear without a trace leaving you worse off than before.
3. Know if they exist
Always ensure that when it comes to money lending the place you are applying to exists. Scammers have gotten smarter by creating fake sites and information that is available online. Some even go as far as setting up a fake residential building, and once they have what they want from you they will disappear without a trace. Search the website to see which other states it legally does its business. They need to be registered in the state in which they are operating in, if not steer clear from them. Follow any links or phone numbers used in an email separately and not from your own computer. Scammers can hack into legitimate companies and use their registration numbers to appear legitimate. By finding out the information separately can prevent you falling into their cunning traps.
4. The generic email address that’s spelt wrong
The process of getting your personal loan approved can take some time due to lenders trying to verify if you are ready to receive such a loan. Alas! You receive an email that states that you have been approved. The wording looks professional, right down to the signature and logo at the end. Before you celebrate the fact that you are one step closer to whatever it is you need to purchase, check the email address. If it is sent from a generic email like, Gmail, Hotmail, outlook these are warning signs. Well established financial institutions usually have their own email addresses spelt with the company name and end in ‘.com.au’. If the company name is spelt incorrectly then by all means avoid replying.
5. Avoid acting immediately
Scammers can put pressure on you to act now by giving them funds upfront in a certain amount of time. If this is done before you have even received any paperwork avoid them. Once you have received any paper work, don’t be quick to sign. Go through it carefully, and if there are any terms or phrasing you don’t understand you should be able to contact them. An accredited personal loan lender will make sure that you understand what you are getting yourself into by leaving you with a clearer understanding. If you want to make sure that this is a legitimate contract or deal you can enrol the service of a financial helper.
6. Wiring money
If a lender asks you to make a payment on your loan by wiring money, then make a run for it. They are only trying to sink you hook line and sinker. This is especially if you are applying for a loan online. It is difficult to trace the funds once you have sent them through, especially if they reside in another country.
7. Wolves in sheep clothing
Be careful of so called lenders who associate themselves with accredited financial companies. Especially if you ask them questions on how they are affiliated with the company and they give you a dodgy response. The key is to research. Call up the company they claim to be affiliated with to see whether this is true.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
