Introduction
Bad loan lending companies are on the rise and are among those spreading scams in many states. The main reason for these scam companies is trying to get away with ones money. There are ten ways that a person can employ in identifying bad loans.
Top 10 Ways to Spot Bad Loans
The 1st way to spot a bad loan is if in any case the lending institution asks for some upfront payment. In most cases, the company will make one believe that the money is meant for insurance, premium or collateral purposes or else as for a security deposit. With various laws imposed in nations, it is illegal for any loan lender to ask for upfront payment.
The 2nd way is if the loan is offered over the phone or via the internet. Loans offered through these methods are usually a scam. This is because the company asks for ones personal and financial information through the medium and no one can tell if it exists or not. Such information should not be given out easily as it can be used for theft.
The 3rd way to spot such is checking if the lender guarantees one of receiving loans. The non-scam lenders never guarantee of such as there are various qualifications one must meet. The guarantee should be given after the company checks on ones credit status which determines the amount one can get.
Researching on one’s own through the internet is the 4th way in determining bad loans. This is achieved through typing the name of the company along with the word scam in the search engine. This will always result in information concerning the company.
The 5th way to spot such loans is through paying a visit to the company’s offices. Their address is well provided in the internet but in real sense, the company might be virtual. If the offices are there, one can check on the frequency of people going for the service as well as investigating whether the previous ways apply.
Checking on the Better Business Bureau is the 6th way in identifying bad loans. This allows one to know the company’s record in deep details. Bad loan companies might not appear on the list in the Better Business Bureau.
Moving onto the 7th way to spot bad loans, the company’s name is of great importance. The scam companies tend to use copy-cat names similar to popular legitimate companies. They also create websites that look much the same as the respected organizations just to confuse their clients.
The 8th way is checking whether the lender is registered by law in their respective states. In most cases, bad loan companies are never registered as their main interest is getting away with people’s money. This check could be simply done by contacting the state’s Attorney General or the respective banking departments.
The 9th aspect is the mode of payment the company asks for. Scam lenders will always ask for payments to be made directly to individuals. This request is never made by legit companies thus any case of such proves the case to be that of a bad loan.
Finally, the 10th way is checking on the interest rates offered. An abnormal rate, that is a very low rate, should leave one with a big question. Most people would prefer the lowest interest rate but one should always know that cheap is expensive.
