Personal Loan Red Flags: 3 Signs You Need to Retreat
Given the world’s current situation, many people are left unemployed or without the proper means to live comfortably. The pandemic has altered the course of the world, and when it comes to finances, many people turn to alternatives—such as personal loans. While these financial options have indeed saved countless lives, the interest in personal loans has also paved the way for others to rise, such as scammers.
COVID-19 related fraud has steadily increased, and complaints about various financial scams have plagued the Federal Trade Commission (FTC) since 2020. Personal loan scams are among the most prevalent, however, as more and more people fall prey to these traps—more often than not, out of sheer need.
If you’re looking to explore personal loans soon, it’s important to first sit back and explore the possibilities of falling into a scam. You may have found the right personal loan for you, but pondering on potential red flags will allow you to avoid losing money and having to file complaints later on. Watch out for these warning signs:
Sign #1: The offer is too good to be true
Personal loans are amazing options, but if a package sounds too good to be true, it most likely is. Most lenders today do offer fast approvals, but if their websites are littered with raving reviews from countless clients, accept the poorest of credits, and never ask for a credit check, you’ll want to pause and think about what they could actually be after. You’ll want to do some research first, especially if those reviews don’t look promising.
It’s also important to remember that most lenders rarely reach out to you—getting letters in the mail can be common for bigger banks, but if you’ve never heard of them before and are offering a good deal, you’re better off turning them down.
Sign #2: They’re pressuring you to say yes
Reaching out is common, especially if they wish to follow up on your end. If a lender begins applying pressure, however, block off their advances immediately. Never bend to what they wish, as a legitimate lender never uses any pressure tactics. You shouldn’t be made to decide on the same day, especially if a large sum of money is involved.
Scammers will also likely push you to disclose personal information, which includes your bank account, Social Security, and even credit card numbers—which is a huge red flag. Trustworthy lending institutions will never force you into compliance, especially since the personal loan application process will take time.
Sign #3: You’re asked to pay for high origination fees
Although origination fees do exist, many lenders choose to not ask for such fees anymore. You’ll likely only be asked to pay a small fee, but it should never equate to a huge percentage of your total loan amount. Should you find yourself being forced to pay high fees, it’s time to seek another lender.
The Bottom Line
The times are hard, but personal loans exist to help you get by until things slowly turn around for the better. Unfortunately, scammers and countless predatory lenders try to milk the situation, all by offering too-good-to-be-true package deals. Stay away from those that do, along with people who pressure you into giving away information and paying fees. When in doubt, trust your gut—you’re better off seeking financial aid elsewhere.
When push comes to shove, seek out a trusted and reputable lender such as Athens Finance. We have always valued customer service and our experienced manager has been in the business for almost a decade. We offer you the best personal loans in Athens, AL, tailored according to your specific needs. More importantly, we make sure that your payment plans stay affordable.
No hidden fees and no red flags—just passion for finance. Reach out to us today to learn more.
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