How to Spot The Most Common Loan Scams This Year
It is no secret that there are many financial scams, especially regarding loans, during these challenging times. Loan scams are some of the most reported types of fraud in the stimulus niche. With the pandemic still raging on, scammers are only getting more creative in their efforts to take advantage of people desperate for financial assistance.
So, what are some of the most common loan scams that you should be on the lookout for this year? Here are a few to keep in mind:
1. Advance-Fee Loan Scams
A scammer will approach you and offer you a low-interest loan in exchange for a specific amount for an upfront fee. These scams can go in the form of emails, text messages, Telegram conversations, etc. Usually, criminals word these approaches with the usual terms that you can see in a loan-getting process, such as: “application fees,” “origination fees,” or even “processing fees.”
If the scammer thinks you’re onto the bait, they will try to lure you into getting one. Those fees must be paid through unusual means like Apple gift cards, Google Play store cards, etc. If you say you can’t pay the upfront fees, they will still offer the loan but with the cost added to the loan amount. They will then make fake electronic info that says the money has been added to your account.
What’s insidious about this scam is that lenders often offer their upfront fees to be included with the loan amount. Most banks and lenders require you to pay by cash upfront in one of their branches or through an electronic transfer. You can easily spot this scam if the person on the other line requires you to pay through other means like the ones we mentioned earlier.
2. Debt Cancellation
In the loan offers universe, it’s normal for people to be in debt. There are several definitions of debt, but for clarification, we’re talking about the debt you get from loans. Now, a lot of people have debt, especially students. This scam promises that they will remove all of your debt through various means and that you’ll pay them for the service.
It might sound too obvious, but many people fell victim to this type of scam at the height of the pandemic. Of course, there are also a lot of private debt settlement companies that are legit, but this type of scam works the same way. The only difference is that they won’t help you settle your debt.
Once they get their payment, they’ll be gone. So how would you know if you’re dealing with a legit debt settlement company? One thing you can do is to look for their license to operate. Legit companies have licenses and are approved by the state. If you can’t see one or if they don’t provide anything that makes them legit, then you may have had a scammer in your hands.
3. Social Media Loan Scams
It’s a relatively cut-and-dry scam that’s very easy to spot. Have you ever seen an advertisement offering cheap loans that are fast and easy to get? If yes, then you may have come across a scam.
While not all of them are scams, a good portion of it is. What they do is if you click on their link, you’ll be prompted to a sheet where you have to put all of your relevant information and bank account details.
In short, it’s a phishing scam that’s out to get your bank account details. If you fall prey to this scam, your bank account details will be stolen, and there’s a good chance it will be empty by tomorrow. Thankfully, it’s pretty easy to catch. The difference between a phishing loan offer and a legit one is that a legit one will not require you to put in your bank details.
4. Guaranteed Approval
This one is also relatively cut-and-dry. Most lenders have requirements that you need to meet. While some of them are much easier to fulfill than others, the point is that all banks and lenders have requirements before you can get a loan. It means that you’re only approved once you meet them.
So any lender that offers guaranteed approval is probably out to get your money. Hence, if you need to borrow money ASAP, make sure to only look for loans from trusted sites like CreditNinja.
If you fall prey to this scam, fraud lenders will bombard you with fees and high-interest rates to get you what you’re worth. So how to spot this one? It’s easy; there’s no such thing as guaranteed approval.
There are a lot of scams running around these days. While most are easy to spot, that doesn’t mean you can be complacent regarding loan products. Always be on your guard, or you’ll easily be a fraud victim.
How To See If a Loan Offer Website Is Fraudulent
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How To Report a Loan Scammer
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Related articles: Top 5 Tips to Avoid Credit Card Fraud
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