How to Spot Personal Loan Scams and Protect Yourself

Personal loan scams can be devastating, especially when you’re in a financial bind and need money urgently. Instead of receiving the loan you need, scammers take your money or personal information, leaving you worse off. At O1ne Mortgage, we prioritize your financial safety and well-being. Here are eight warning signs of personal loan scams to watch out for, and what to do if you fall victim to one.

The Lender Guarantees You’ll Be Approved

Legitimate lenders will always verify your identity and ability to repay a debt before approving your loan application. If a company guarantees approval without any checks, it’s likely a scam. While preapproval and prequalification can give you an idea of your chances, they are not absolute guarantees. Always be cautious of lenders who promise guaranteed approval.

The Lender Pressures You to Act Immediately

Scammers often use high-pressure tactics to make you act quickly without thinking. They might threaten to withdraw the loan offer or promise a low interest rate only if you apply immediately. It’s crucial to take your time and consider your options. Even if the lender is legitimate, you might not want to work with a company that uses such aggressive tactics.

The Lender Demands an Upfront Payment

Advance-fee scams are common in the personal loan industry. Scammers ask for an upfront fee in exchange for finding or approving a loan, then disappear with your money. While legitimate lenders may charge application or origination fees, these are usually deducted from the loan amount. Be wary of any lender asking for an upfront payment, especially if other red flags are present.

The Lender Asks for a Lot of Personal Information

Some scammers use fake loan applications to collect personal information, which they then sell or use for identity fraud. While legitimate lenders will ask for your name, address, and Social Security number to verify your identity, be cautious if they request unusual information like your mother’s maiden name. Always look for other signs of a scam before sharing personal details.

The Lender Calls or Texts You First

Real loan companies may advertise and send letters or emails, but they rarely call or text you out of the blue. Scammers often purchase marketing lists with contact information of people who have searched for or applied for personal loans. If you receive an unsolicited call or text offering a loan, it’s best to be skeptical.

The Lender Isn’t Registered in Your State

Legitimate lenders must register in every state where they issue loans. You can usually find a list of licenses on the lender’s website or verify their registration with your state’s attorney general’s office or bank regulator. If a lender isn’t registered in your state, it’s a major red flag.

The Lender Doesn’t Have a Physical Address

Even online-only lenders should have a physical location where their employees work. Scammers often avoid listing an address to stay anonymous. If an address is provided, check if it matches the address on the state license. A lack of a physical address is a significant warning sign.

The Lender’s Website Isn’t Secure

Most legitimate websites are secure, but some scam sites are not. Look for “https” in the URL and any browser warnings about an unsecure site. Even if the company is legitimate, an unsecure website could indicate poor data protection practices, putting your personal information at risk.

What to Do if You’ve Been Scammed

Falling for a scam can be stressful and costly, but you’re not alone. According to the Federal Trade Commission (FTC), nearly 26,000 people reported paying a scammer an advance payment for credit services in 2023. If you’ve been scammed, here are some steps you can take:

• Try reversing the transaction: If you paid with a credit card, bank transfer, wire transfer, or P2P app, contact your financial institution quickly to see if the transaction can be reversed.
• Report the scam: Inform the FTC at ReportFraud.ftc.gov to help the government spot trends and prosecute scammers.
• Report identity theft: If the scammer has your personal information, report the identity theft at IdentityTheft.gov. You can also add fraud alerts to your credit reports and freeze your credit reports for free.
• Secure your accounts: If you shared usernames and passwords, create new and strong passwords for those accounts.

Get Matched With Legitimate Personal Loans

There are many legitimate personal loan companies out there. Comparing options from multiple lenders can help you find the lowest fees, interest rates, and highest loan amounts. At O1ne Mortgage, we can match you with personal loans tailored to your unique credit profile. Call us at 213-732-3074 for any mortgage service needs. We’re here to help you find the best loan options and ensure your financial safety.

Remember, always be cautious and do your research before committing to a loan. Your financial well-being is our priority at O1ne Mortgage. Don’t hesitate to reach out to us for any assistance.