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How to Check if a Loan Company is Legitimate in Australia

Read about how to check whether your small loan company is a legitimate one right here with Savvy’s handy guide.

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Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
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, updated on January 30th, 2024       

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At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

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Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on January 30th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Borrowing money in Australia should be a straightforward process, not a minefield of dodgy lenders, but it’s always crucial to keep an eye out for potential scams. That’s why, before you sign on the dotted line, it’s important to know how to check if the loan company you’re looking at is legitimate. You can learn about how to find out this information right here with Savvy in our comprehensive guide.

How can I check if a small loan company is legitimate in Australia?

The Australian Securities and Investments Commission (ASIC) regulates financial services in Australia and allows you to perform checks on companies to determine their legitimacy. Via ASIC Connect, you can search for lenders to see whether they hold an Australian Credit Licence (ACL) number. A legitimate lender will have an active ACL listing with contact details and licensing information.

This is the most effective way to check whether a payday loan company operating in Australia is legitimate. You may also wish to use this search function to check whether they have the appropriate Australian Company Number (ACN). This information should be accessible on their website, so you can double-check this as part of your personal review process.

What should I do if I think a loan company isn’t legitimate?

If you suspect a loan company might be illegitimate, it's essential to act swiftly and protect your financial security. Here are some steps to take:

  1. Stop all communication: immediately cease any communication with the company, including emails, phone calls or text messages. Do not provide any further personal or financial information.
  2. Report the suspicion: you can report your concerns to multiple authorities, including ASIC, ReportCyber and the Australian Competition and Consumer Commission (ACCC).
  3. Secure your data: take steps to protect your personal information by changing passwords for any accounts you used during your engagement with the company. Consider requesting a ban be placed on your credit report to prevent unauthorised access.
  4. Seek legal advice: if you believed you’re the victim of a scam, consult a financial advisor or lawyer to discuss your situation and explore potential legal options for recovering any losses or seeking compensation.
  5. Share your experience: warn others about your experience by sharing your concerns on trusted online platforms or reporting sites. Your voice can help protect others from falling victim to similar scams.

Remember that staying vigilant and acting promptly can minimise potential damage and help authorities crack down on scams. Don't hesitate to seek help and support from relevant organisations and professionals if you find yourself in this position.

What are some tips to consider to help me avoid loan scams?

There are several areas you should look into when seeking out your small loan to help you avoid falling victim to a scam. These include:

  • Beware of “too good to be true” offers: if a loan offer seems unrealistic or too good to be true, it probably is. Scrutinise the loan products offered. Do they seem realistic and within industry norms? Avoid terms with excessively high interest rates, hidden fees or unreasonably short repayment periods. Be wary of companies promoting guaranteed approval or immediate loans without credit checks.
  • Online presence: thoroughly explore the company's website. Look for professional design, clear contact information and detailed explanations of loan terms and fees. Beware of poorly written content, excessive typos or missing phone numbers. You may also wish to check for online reviews on legitimate platforms.
  • Never pay upfront fees: legitimate lenders don't charge upfront fees or require you make a deposit before approving a loan. Be wary of companies demanding money before processing your application, as this is a common scam tactic.
  • Trust official channels: when seeking a loan, stick to established and reputable lenders with a proven track record. Avoid using unsecured online platforms or responding to unsolicited loan offers via email or phone calls.
When you apply for a small loan through Savvy, you can rest assured that the lender you're matched with is legitimate, as we only partner with trustworthy companies.

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Disclaimer:

The information on this website is of general nature and does not take into consideration your objectives, financial situation or needs.

For loans between $2,050 and $5,000, the APR is between 21.24% (minimum) and 48% (maximum) per annum. Comparison rate of 65.4962%. Minimum term is 16 days and maximum term is 24 months. The cost of the loan is a $400 establishment fee and monthly interest charged on the amount borrowed. For example, a loan of $3,000 over 3 months with an APR of 48%, (comparison rate of 65.4962%), will have an establishment fee of $400, monthly repayments of $1,225.20. Total repayments of $3,675.60 and total interest payment of $275.60.

Warning: A comparison rate indicates the true cost of a loan. Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.

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