How to Check If a Personal Loan Company Is Legitimate – When you need to borrow money urgently, it is normal to look around for the perfect deal that you can find. As you search around for the best lender, you might come across an offer that sounds too perfect. Although there are lots of honest personal loan companies, you need to know that there are also personal loan scams you need to keep an eye out for.
As a result of this, it is very vital to know how to check if a personal loan company is legitimate. In this article, there are several ways you can check if a loan company is legitimate and can be trusted.
How to Check If a Personal Loan Company Is Legitimate
Unfortunately, scammers target individuals who are looking for quick access to loans. And for this reason, before you hand over your information to a lender, you need to check whether it is real. This is especially true if the lender is not well established, recognized, and has an easy-to-access reputation. Below are some of the steps to take to know whether a personal loan company is legitimate:
Check online for their presence
Check the lender’s official site to see if it is sleek or sketchy. One big warning sign is that it’s not secure. According to Experian, “If there’s no‘s’ after ‘http’ in the site address or no padlock when giving private information, the site’s not safe.”
Google the company’s name for customer reviews or news on customer issues. You can also search “scam” with their name to check if the company is legitimate. Legit companies can have some bad reviews, but lots of complaints from past customers are red flags.
Ensure that the company is registered in your state.
Before any lender can do business in any state, they must have a license from that state’s regulatory agencies. Check with your state agency to see if the lender can work with you.
Check with BBB (Better Business Bureau).
Although BB is not a definite source to check if the lender is legit, it can help you check if the company has a good history of treating customers. Ensure that you watch out for companies that have zero reviews. These might be signs of loan scams.
Check for the lender’s contact details or mailing address.
Contact the company if it has a phone number and verify. If there is a physical address listed on their website, look it up with Google Maps to check if the search result is a business. Listing no address or just a P.O. box can be a huge red flag.
What are the Signs of a Personal Loan Scam?
Knowing some of the common warning signs of loan scams can help you protect your money, yourself, and your personal information. Most scammers have a pattern of aggressive behavior. So, here are some signs that you can look out for:
- If the company asks you to pay an application fee or an upfront payment before getting a loan, After you pay, you may never receive the loan or hear from the lender. It is said that these types of scams target individuals who have bad credit or find it difficult to get a loan for other reasons.
- Lenders will always check your credit before giving you money. So, if your lender says there is no problem with bad credit, this can be a sign of a scam.
- Reputable lenders will never make a loan offer, guarantee you a loan, or promise you an amount before checking your credit. They will verify your income and your application before approving your loan. So, any lender that guarantees a loan without knowing anything about you is a big red flag.
- Never give out your personal or financial account information before filling out an application. Any lender who asks you for them is a big red flag. Ensure you know the company is legitimate and the reason they need the information before giving it out.
- If the lender did not disclose application fees, origination fees, and other fees for processing your loan upfront, look for your loan elsewhere.
If you get a phone call, direct message, or email offering a line of credit or loan, it is a scam. Don’t take the bait.
What should I do if I get Scammed?
If you think you have been scammed, first of all, notify your credit card company or your bank. Report any fraudulent activities, close your bank accounts, and open new ones. Submit a complaint to the FTC online, and then file a police report. After that, contact the three major credit bureaus: TransUnion, Equifax, and Experian. Let them know that you have been a victim of a loan scam. So that they can restrict access to your credit reports, they can put a fraud alert or credit freeze on your file.
To avoid being a victim of a loan scam, go to well-known lending companies. Consider going for credible’ partner lenders. They include Avant, Discover Personal Loans, Axos Bank, Lending Point, LightStream, OneMain Financial, and Upgrade. These lenders provide fast online personal loans with next- or same-day funding.