Tips To Avoid Losing All Your Savings With Payday Loan Scams
Bad creditor’s loan or guaranteed online loans is also known as payday loan, which are short loans and provided to those who need fast money to help them take care of their requirements before paychecks. Even though the amount offered is large, most opt for small sums to tide them over till their paycheck arrives. This is not like the car loan or mortgage loan, as the money from these loans are mainly to take care of utility bills or rent bills or even groceries, when people fall short of cash. There are many companies offering this kind of loan, however, not every one of them are legitimate and you should be careful in giving your personal details, especially on the internet. Here are 10 Tips To Avoid Payday Loan Scams.
10 tips to find a legitimate payday loan company and avoid scams
1. Find out if the loan company you select has a traditional store also other than online one. You can travel to the store and confirm their legitimacy.
2. Unclear fee structure. Most legitimate loan companies display their terms and condition and fees clearly on their website. The fees are calculated according to the amount of money you take. Do not sign contracts if you fail to understand the conditions.
3. Registered. Loan companies have to be registered in the state where they conduct their loan business. Check the registration of payday loan companies to avoid scams.
4. Copycat loan companies. Some loan companies scam people by using trade names which are sound similar to familiar to reputed companies, they even copy the logo. They also do not provide enough information on their website.
5. Phone loans. Though phone loans are common, there are fake companies which ask for fees before giving the loan. This is an illegal practice in USA.
6. Research the loan company. You can check the legitimacy of the loan company through the Better Business Bureau, as well as the Attorney General of the state you are in and also the state of the loan company.
7. Compare rates. You should compare interest rates of various payday loan company, so that you will get a good idea of the standard rates.
8. Common scam. The most common payday loan scam is when the loan company offers very low interest rates. These kinds of loan scammers are more interested in your personal identity and they will also not have any address or phone number in their website.
9. Spotting a scam company. It is quite easy to spot a fake loan company, as they usually introduce themselves through spams or even unsolicited emails.
10. Money transfer method. Money transfer through EFT is another way that illegitimate payday loan company scam people. If they request money through EFT, you will lose all your money in your savings. You should opt for Western Union as the mode of money transfer.
According to studies, payday loans are the most risky kinds of loans, because you will find more frauds and also because of the high interest rates charged by them. Most scams occur through online loan companies, thought there are legitimate payday companies online. You should research really hard to find the reputed one.