When you have bad credit, it can be hard to find a lender who is willing to work with you. However, there are companies out there who are willing to give bad credit loans. While some of these companies may be legitimate, others may be scams.
Here’s how to spot loan scams:
- Lender guarantees approval. Be wary of any lender who guaranteeing approval. Unless you have excellent credit, it’s very unlikely that any lender will be able to guarantee your loan.
- The lender demands payment upfront. If a lender asks for payment upfront, this is a red flag that they may be a scam. Legitimate lenders will not ask for payment until after you have received the loan.
- The lender has no physical address. A legitimate lender will have a physical address that you can verify. If a lender does not have a physical address, this is another red flag that they may be a scam.
- It sounds too good to be true. If a loan offer sounds too good to be true, it probably is. Be wary of any offer that seems too good to be true, such as an offer of a very high loan amount with low interest rates and no fees.
- If you get a loan offer by phone without asking for it, through the mail or even through a door-to-door solicitation , be on your guard. One of the most common red flags is receiving unsolicited offers for loans, either by phone or through the mail. Another warning sign is being approached by someone who is offering loans door-to-door. If you’re not expecting a loan offer and someone contacts you out of the blue, there’s a good chance that they’re trying to scam you.
If you are considering taking out a bad credit loan, make sure to do your research to ensure that you are working with a legitimate lender. By following these tips, you can avoid falling victim to a loan scam.