Before applying for online installment loans, you need to ensure that you’re dealing with legit lenders. Learn more about online installment loans like the factors that tell if it is legit or not:
Installment loans online are types of loans that are payable in predictable monthly schedules. However, with plenty of loan providers operating over the internet, it’s becoming tricky to discern which is legit and not, more about short term loans.
Here are 6 signs that tell if online loans are a scam:
1) It doesn’t follow the state regulations.
One way to tell if lenders are legit is registration. Legit businesses like lenders need to secure a business registration. It’s a great way to tell if you’re dealing with a legitimate business or a scammer.
If they have that registration, it means that they are following the state regulations. You’ll be protected from fraud and illegal practices that online lender scammers do.
However, make sure that the lender operating in your state is registered in your state and not in other states. Don’t deal with any lender that says they are registered in another state. Choose a loan provider online that has a permit to operate in your state.
2) It asks for upfront fees, interest, and charges.
A legit lender is an upfront about the fees, interests, and charges of the loan. They are not going to leave you wondering how much you have to pay.
Before dealing with any lender, research about the lender online. You can check their site directly. Legit lenders provide the right information on their site.
If not, they provide chat support or a method for you to reach them like an email. Interest fees, charges, and other fees are very important when applying for a loan.
Before signing the loan agreement, make sure that you are informed beforehand. Don’t ever make a deal when you don’t know how much the loan costs.
3) They don’t provide their contact details.
Legit companies like online lenders have contact information on their site. Since they operate over the web, they must provide their visitors with a way to contact them.
The site must have their physical address, site, email address, and contact numbers. They must also indicate the name of the contact person.
4) They are not found on the database of the Better Business Bureau.
Legal loan providers can be found on the Better Business Bureau’s (BBB) database. Access BBB local site and search for “check out a business.”
You can check if the lender is legal by searching their company name, website, type of business, or any identifying information. There’s no excuse for not being on the list of BBB if they are legit.
5) They require you upfront money.
Legal online lenders are not asking and will not ask for upfront fees. There’s no need for this.
If a lender asks you to pay money before processing your loan, it’s a red flag that you must watch out. Don’t believe this kind of tactic. Several unscrupulous lenders operating online do this to bait their next victims.
6) Their site says, “Apply now, offer expires soon.”
Have you encountered a site using these lines? Don’t spend more time thinking if you’re going to apply for the loan or not.
It’s an obvious marketing trap. Real lenders are not going to give you limits on until when you can apply for loans.
If they are giving you an expiration for the offer, it’s a trap. This kind of tactic makes you want to decide and act now.
Borrowers who believe this kind of pressure end up with scammers. Their goal is to make money, so they are going to persuade you by offering you a loan at a very limited time only.
There are plenty of signs that tell that you’re dealing with an online loan scammer. If they guaranteed you a loan before you even make your application, it’s a major red flag.