How to Spot A Legitimate Lender and Avoid Loan Scams

Do you find yourself suddenly in need of extra cash to pay for something important? If your current financial condition is getting tighter by the minute, applying for a personal loan can be your best solution. 

However, if your current credit score isn’t great, you may not have that many options for borrowing. Since banks and other credible lending institutions follow a stringent screening process, you may not be able to fulfill their requirements and have a difficult time acquiring a loan. 

Fortunately, innovations in the credit industry have given people more lending options outside the four corners of a bank. Nowadays, you can find several lenders that are more financially inclusive and primarily cater to members of the underbanked sector. 

But, as good as this may sound, you must always stay vigilant. Not all lenders are credible, and there are plenty of scammers that are always on the lookout for the next person they can take advantage of. If you’re planning to avail of a loan soon, it’s important to know if a lending company is legitimate and reliable. 

To help you out, here is an infographic to make it easier for you to spot red flags that let you know if a lender is legitimate, as well as what to do in case you suddenly get scammed.

How to Spot A Legitimate Lender and Avoid Loan ScamsSpotting a legitimate lender to avoid loan scams

You may get excited once you come across a lender that guarantees a loan, but don’t let your feelings get the best of you. Making a transaction impulsively will actually worsen your situation and potentially add to your financial strain. If you want to find out if a company is trustworthy, you’ll need to start by observing the lender in detail.

When identifying scammers in the lending industry, spotting red flags at the onset is one way to avoid falling victim to their schemes. Is the company’s site fully functional? Are all the necessary details of the lender displayed? Are the terms, processes, and conditions of a loan clearly defined? If you find any sort of discrepancy in their service quality or operations, you may want to look for options elsewhere. 

To investigate further on a lender’s legitimacy, it’s time to dig deeper by observing the company’s behavior and reputation. If a lending company requires upfront payments, asks immediately for your personal information, and urges you to make a quick decision, don’t push through with your transaction. Black hat practices such as those mentioned are an immediate reflection of their credibility. 

Taking note of the experiences of a lender’s past clients is also a great way to find out if they can be trusted. Reviews may not give you the whole picture of a company, but it will give you an idea of what to expect from them if you plan to do business with them.  

You’ve been had! What now?

In case you end up on the wrong side of things, don’t panic. Authorities will be more than glad to help you. Go back to your first transaction and collect every email, screenshot, and other pieces of documentation that can help you file a lawsuit. 

Once you’ve gathered all the necessary files, report your case to the Securities and Exchange Commission, and they’ll apprehend the agency that took advantage of you. To make sure that no one else goes through the same difficulties and prevent them from doing business with the fraudulent company, you can share your experience with others.

With the right amount of vigilance and awareness, you can protect yourself from any kind of scam. Taking note of the checklist above will make it easier for you to know if your lender is legitimate or not. 

If you’re on the search for a credible company that can provide the necessary solutions to your financial dilemma, look no further. As the premier loan app in the Philippines, you can count on Cashalo to help you handle your situation with more flexibility and comfort, minus the shady practices.

Stay on the lookout for scams

Personals loans are sometimes intimidating to make, but it may just be what you need to pay for a large expense. By partnering with a legitimate lending institution, you’ll be able to handle your transactions with ease. As long as you keep these tips and warning signs in mind, you’ll be able to protect you and your loved ones and spot loan scams immediately. 

With a mission to establish a financially inclusive nation, Cashalo wants you and the millions of Filipinos to take bigger strides towards a financially healthy future. Are you currently on the lookout for a reliable lending option? Download our credit finance app today to get started.