Have you ever lent money to someone and has never been repaid back? Everyone must have experienced this situation at least once in their lives. Whether it is just one dollar or a hundred dollars, you should return the money you borrowed. It is one of the most common loan scams. But do you know that there are loan scams that victimise borrowers and not the SG money lender or individual moneylender?
When our pockets get tight; and our banks begin to break, we rely on thebest money lender in Singapore. And some scammers take advantage of this unfortunate need. A legal money lender in Singaporeexists, but there is also a small and shady financial institution sly loan offers.
This article will discuss the signs of loan scams and how to avoid them:
Loan Scams and How To Spot Them
Before we discuss the signs of loan scams, we must first understand what a loan scam is.
Loan scams or predatory loans are fraudulent and dodgy businesses and financial institutions that victimise people with financial problems by offering too good to be true loan arrangements.
Loan scams may require people to send a certain amount of money before processing their loan applications. Once the illegal moneylender gets the “advance fee” from the borrower, they would simply disappear without giving the promised loan.
Some fishy moneylenders ask for the borrowers’ personal information like social security numbers, addresses, and access to contacts. These moneylenders would start to harass the borrower using this information if they were unable to pay on the agreed time.
Whether you are borrowing a personal loan ora working capital loan, it is important to look for a legalSG money lender or a trusted individual moneylender.
Telltale Signs Of Loan Scams
The first step in avoiding loan scams is differentiating a legitimate loan offer from the illegitimate ones. Here are the signs of a loan scam offer:
RED FLAG #1: DOES NOT CONSIDER BAD CREDIT AND PAYMENT HISTORY
The reason why people pay their previous loans on time is to have a good credit score. But why do credit scores matter? Simply because your credit score reflects how good a borrower you are.
People with bad credit scores and poor payment history are less likely to be granted loan offers from thebest money lender in Singaporein the future. If you have an excellent credit record and payment history, a legal money lender in Singaporemay even offer you low-interest loans.
So, obviously, any legit financial institutions like a bank, an SG money lender, and investor or individual moneylender will take into account and thoroughly check your credit score and payment history. If your money lender ignores or doesn’t care about any of it, it is a loan scam.
Dubious moneylenders may even purposely target borrowers with bad credit scores. Why? Because if the borrower failed to pay within the agreed period, the moneylenders would continue to increase the interest fee for delayed payment, making the borrower fall into the debt trap.
RED FLAG #2: UNREGISTERED FINANCIAL INSTITUTION
There are lots of online money lending services; some have mobile applications, too.
There are several ways to distinguish a legal online money lender in Singapore from a fake one.
Firstly, there should be an information page on the website containing the name of the company, office address, contact details, and even necessary licences.
Don’t give your personal information to basically anonymous websites.
RED FLAG #3: REQUIRES ADVANCE FEE OR UPFRONT PAYMENT
Dubious money lending institutions mask advance fees and upfront payment as “application fee” or “processing fee.”
A legal money lender in Singapore doesn’t ask for these advance fees from your wallet. Instead, it is taken out from your loan, and it is not called an advance fee nor application fee but an origination fee.
If you encounter these kinds of fees, walk away immediately.
RED FLAG #4: UNSECURE WEBSITE
As mentioned earlier, there are now money lending websites and mobile applications available.
There are lots of ways to spot unsecured and dubious money lending websites.
Firstly, the website’s URL should have “https” instead of “http” at the beginning of the link.
Secondly, there is a padlock icon beside the URL. It means that the website is secured.
Lastly, check if they have tacky websites. The best legal online money lender in Singapore has a clean, organised, and easy to use the website. It must contain information about the company. If the website layout is tacky or unprofessional-looking and has suspicious ad pop-ups, it is probably an illegitimate money lending website.
RED FLAG #5: SUSPICIOUS BEHAVIOUR
Shady money lenders use techniques to convince their person to take a loan.
Firstly, they will reach you by phone, snail-mail, or knock on your doors. A legal money lender in Singaporeadvertises its service through online platforms, TV, radio, and newspaper.
Secondly, it is probably a loan scam if it is too good to be true and guarantees quick approval. A legit loan undergoes long and even tedious processing.
Lastly, it is a loan scam if the moneylender pressures you to take the loan by setting the deadline, urgent pleas, and frequent calls.
Now that you know the signs of loan scams, here are the ways to avoid them.
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How To Avoid Loan Scams
Research The Financial Institution
Firstly, know if they are a registeredSG money lender or individual moneylenderby contacting the governing bodies that monitor financial institutions.
Secondly, check if the website is secure and contains complete information about the company.
Lastly, look for reviews and warnings from its previous borrowers.
Never Give Personal Information
Never fill out forms asking for your sensitive information like birth date, address, social security number, and so on without verifying the legitimacy of the lender.
Do the same with online money lending apps and websites.
Beware Of Ads, Offers, and Pressure Tactics
As much as possible, stay away from too good to be true offers, attractive ads, and pressure tactics from money lenders.
Never Sign A Blank Document
Refuse immediately if the moneylender asked you to sign a document. Once it has been filled out, review the document thoroughly before signing.
Protect yourself, and don’t fall for loan scams. Use these tips to avoid them.
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