We all have that part of our life where we find ourselves looking for ways to find additional cash. These additional financial assistance is at times hard to find and we end up resorting to a personal loan. Personal loans are effective means of getting that extra cash for unexpected expenditures or even planned ones but our current cash on hand is not sufficient. Getting a personal loan may sometimes be tedious especially when you are still starting to build your credit score. In these cases, we might consider going to unregistered lenders which I highly discourage. There are a few kind of frauds or scams that may be hiding if you transact with lenders who are not licensed to operate this kind of business. Here are some that you may want to watch out for.
- Identity Theft
This is the most common scam that a lender may do to its borrower. They require information about the borrower through an application form and submitted documents. From there on, the lender will start using the information for other fraudulent acts. Identity theft is becoming a common incident in an economic rising community. This is a way for people to hide in other’s shadows to avoid getting caught.
- Predatory Terms
There are cases where unscrupulous lenders will try to attract borrowers with “too good to be true” terms for the loan. These lenders may encourage their borrowers that these kind of terms will be a big slip if the borrower doesn’t go for it. Once the borrower agrees, there are hidden terms in the agreement that may prove to be more burdensome to borrowers rather than being a good deal. It can be hidden fees and usurious rates. It is very important to make sure that your lender is operating within the regulations of the government thus recommending transacting with licensed lenders only.
- Upfront Fees
Licensed lenders work under the regulations as set forth by the government. The operate with ethical practices that often do not require any additional payments for servicing. Some unscrupulous lenders request an initial down payment to fill their pockets and disappear overnight. It is quite necessary to be watchful of these people.