Differentiating legitimate lenders and fraudsters

What are loan scams?

Loan scams are messages/calls from different platforms offering enticing loans to people. Scammers usually target people who are in dire need and would do anything to get some cash. These scam artists are professionals that are trained to make you believe that they come from a licensed firm. The common instruction by scammers to victims is to transfer money before a loan can be disbursed. After the transaction is done, scammers would block the victims and run away with their money. Scammers may ask for the private information of victims such as NRIC, Singpass details and bank account numbers which contains sensitive and personal information. Once information is obtained, scammers may threaten to expose details, steal information or hack accounts to gain money.

Signs that show lender might be a scammer

1. The lender shows no interest in your payment history and only wants to land a deal

Reputable lending companies make sure you have a good history before landing a deal. However, scammers tend to target high-risk borrowers as they tend to be more desperate.

2. The lender is not registered

All money lending companies operating in your state should be registered. Double-check and verify.

3. Demands of a prepaid debit card as collateral

Scammers will require a debit card as insurance but lending companies charge a fee that is deducted from your loan. A prepaid debit card is effective for loan scams as it is untraceable as cash.

4. Unsecured Website

A secured address of a website is protected from identity theft who steal personal information.

5. No Physical Address

Technology such as google maps can show if a lender has a physical location. If there’s no actual physical address, avoid the lender. Scammers would hide and be untraceable to avoid legal consequences.

6. Lender asserts pressure to take the deal

Scammers would give tempting deals and sweet talk you to pressure you to pay as early as possible before finding out they are scamming you,

How to spot a legitimate lender?

1. Easy to Reach

Has a physical address, contact number, customer service, email and usually have a chat function.

2. Professional Customer Service

The staff of lending companies are educated and trained, they can answer your questions and even provide suggestions.

3. Credit History Interest

All legitimate lenders will not give you a loan if you won’t have the ability to pay back, lenders conduct a thorough background check before granting you a loan.

4. Online Reviews

Trusted and reputable lenders usually have reviews online from previous customers

5. Complete loan terms and contract

Lenders are clear about their terms and will provide physical evidence of the contract to ensure legitimacy.

6. No upfront payments such as gift cards

Lenders would talk first and negotiate a deal before any payment.