Loans to Avoid: Loan Scams & How to Identify Them

Applying for a loan is easy, as most loan companies and banks moving their services online. This has increased the need for better online safety.

There will come a time when you need access to money quickly, be it for an emergency or to consolidate debts. This is where loans are your best option. There are many types of bank loans available, and choosing the right one is easy with some guidance from a financial advisor. Reading reviews on review sites is a great way to assess the performance of financial management companies and can assist you in finding the right loans online. Click on the links to be redirected to the best review site in America to read more about online loans and the benefits of reviews in the decision-making process.

As banks and financial institutions move their services online, digital transformation and changes in technology have opened the financial sector to cyber-crime and online data theft. 

With the first bank opening in Philadelphia in 1791, we did loan applications in person at the bank. Customers completed the application form and waited for a response. Online banking has changed this process, and you can have an answer in minutes when applying for loans online. 

What are the benefits of applying for loans online?

  • Online applications reduce overhead costs of banks and loan companies, resulting in lower costs and lower interest rates.
  • The fully automated process for applying for loans online results in a smoother application process and receiving your answer and funds quickly.
  • Online loans are convenient and can be applied for from a smartphone or laptop while on the go.
  • Online lenders have less stringent qualifying standards than most banks and are a great option for those who have bad credit.

Our top tips to avoid scams and ensure the credibility of a loan company

The easiest way to fall prey to online scammers and hackers is to enter your personal information on a dummy site created to steal your personal data and access your bank accounts. Follow these tips to ensure that you apply for loans from legitimate lenders by ensuring their credibility:

#1: Is the company registered? 

The Federal Trade Commission has an online database of company registration information. Search their website using the loan company’s name to ensure that they are a registered business and have applied for all state licenses to operate as a loan company.

#2: Contact the state Attorney General

The state attorney general handles the legal safety of its citizens. You can contact them to verify the credibility of the loan company you are applying for a loan from. They will have a record of all the registration details.

#3: Visit review sites and the Better Business Bureau

Both sources rate business performance on previous customer feedback. Reviews are especially useful in determining the ability of a company to perform a terrific service.

#4: Ask friends and family for recommendations

Speak to those closest to you about who they have used for personal loans. Ask them about the level of service they received and if they would recommend the company to anyone else.

#5: Online search engines

Search for the company name on any search engine to see if there has been any bad press or if it has involved them in any news articles for fraud or scams.