Staying Safe With Loans

We have all read the headlines about loan fraud and how someone seemingly reasonable fell victim to the con artists. Money problems may cause even the best decisions to slide, so it can happen to anybody, even if you believe you are financially wise.

This year, more than ever, you may need to borrow money for a short period of time to see you through to your next payday, but it is critical that you borrow from a legitimate accredited lender and avoid loan sharks. Borrowing money from loan sharks is incredibly risky.

In this article, we are going to talk you through some basic safety for when you are considering taking out a loan.

What is a loan shark?

Loan sharks are those who unlawfully lend money to low-income households. While they may appear amicable at first, borrowing money from them is never a wise idea.

If you borrow money from someone sketchy like a loan shark, you may end up paying significantly more interest than you would if you borrowed legally, which means you may have to make greater payments for a longer length of time. If you fall behind on your payments, you may face intimidation, assault, and threats.

Types of Loan Fraud to Watch Out For

There are several different types of loan fraud you should be aware of. Let’s take a look at some of the most common ones to watch out for.

Loan repayment fraud

Loan payback fraud preys on persons who have previously borrowed money. Scammers frequently employ a fictitious name that sounds close to an existing lending firm. They send letters or emails alleging that you missed a payback deadline and that you now owe the same debt plus a penalty charge. You give them the money, only to discover later that you still owe the original lending firm the whole amount.

Identity theft

Identity fraud occurs when your personal information, such as your name, address, and date of birth, is exploited to conduct fraud without your knowledge. If a criminal obtains these, they may be used to obtain a loan in your name.

Loan Fee Fraud

Loan fee fraud occurs when you are asked to pay a fee upfront for a loan that you will never receive. For example, you may answer an advertisement for a rapid loan and have your application accepted without a credit check relatively soon. The loan business will notify you that you must pay an upfront charge to cover insurance or other loan fees. If it is a fraud, you will lose that fee and will not get your loan. You may also be asked for your bank account information, which might lead to much worse results.

Conclusion

The golden rule that you should always follow when borrowing money is that if it seems too good to be true, it almost certainly is. You should always watch out for fraudulent loan sharks like this. Instead, take out a loan from a reputable source like a bank or a well-established loan provider. You can click here for a fast loan that does not come with a risk of fraud.