Introduction
When you need to borrow some finances, you want to make sure that you’re dealing with a reputable loans company that will properly deliver your loan and take payment with no nasty surprises along the way. Fortunately, there are red flags that can help you avoid untrustworthy loan providers.
In this short post, we have detailed how you can find out if a loan company is worth your time and money. By making sure your chosen company passes all of the standards set below, you can be confident that your loan will be safely executed, not exploited by scammers who want to take advantage of the desperate. If you want to learn more about loans and related financing topics, you should check out creditninja.
Verify Their Online Presence
Thanks to the Internet, you can easily search into a wide span of topics and institutions. When checking out a loan company, ask yourself if you have heard of them before. Some large institutions are household names that have high profiles, so it’s incredibly likely that they’re clean and if they aren’t then there are repercussions for their reputation and potential legal consequences to be leveled against them.
If you haven’t heard of them, search for them online. They should have a website, if not a verified account on a website that includes profiles or aggregates of lending institutions. Check for customer reviews. That doesn’t just show that the company is doing business and has customers but they’ll also be describing their experience, so you know whether they were good or bad.
Beware of botted reviews that seem to be fake or exaggerating the good qualities of the business. If the reviewers have accounts on the site and have reviewed other businesses, all the better.
Consult The BBB
Loan scamming is profitable, so loan scams can still have an online presence. That’s why you should also start consulting the relevant BBB organization. The Better Business Bureau is made up of 106 independent organizations in the US and Canada, so they should have a branch near you that should have the business registered with them. If they are not, it’s probably best that you avoid the company offering loans. Even if they are legit, they have paperwork issues that could make lending from them a pain.
Consult The Attorney General Office
If you want to be absolutely sure, you should look at the attorney general’s records for your state. Lenders are legally required to register with the attorney general office, so they should definitely have an entry in their databases. If the company doesn’t, you should stay far away from the company and report them to the office.
Beware Manipulation
Beware the manipulation tactics that scammers or untrustworthy, heavy-handed loan companies use to try and get money from you. Their correspondence will use emotive language instead of the relatively dry language used in the finance world. They may even be aggressive, which is a tactic to make you emotional so you ditch rational thought and don’t see them for the scammers that they are.
It’s important to follow your gut instincts sometimes and, when dealing with lenders, you should avoid those that give you feelings of doubt. If you are uncomfortable with a lender and the way they conduct themselves, you should back away and find somebody else. Maybe it turns out that they are genuine but you don’t want added stress when dealing with them, especially if they conduct their business in an unprofessional manner.
Suspicious Behavior
Knowing what is suspicious when dealing with a loan company is important. If you’re a beginner, you haven’t got the experience with good loan companies to call out the bad ones. Here are some misconceptions and other red flags that you should also keep in mind.
- While origination fees exist, they are typically taken from the loan and not asked for upfront. It’s a warning sign if a lender asks for upfront payment.
- Sometimes a lender will want to know your banking information. This allows them to find your account and allocate the loan funds to it. If they ask for your login information or any of the personally identifiable information that can be used to withdraw money, they shouldn’t be trusted.
- Many scammers prey on those with bad credit by offering loans that are too good to be true. While legitimate bad credit lenders exist, you should always do your due diligence by searching into the company using the above points.
Ingrid Maldine is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Ingrid’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Ingrid has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Ingrid has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.
