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Money runs out easily nowadays when the needs and demands are too high. Pay day seems to be a long time and bills are piling up on the table. Then, an advertisement of a car or house that we dream of fills the empty walls along the streets. It is inevitable to be short on cash, we all can relate to that. Then, the idea of loan appears to be tempting.
Getting a loan is now a common solution to our cash problems may it be housing loan, car loan, business loan, among others. Even rich people and huge companies get into it. But we must be careful in trusting lenders. Swindlers use the desperation and frustration of people badly needing money to lure them into loan scams. Anyone can be scammed if he/she does not know the caution signs to look for.
Familiarize yourself to some common red flags that may indicate a loan scam.
1. Advance Fee Loans
This scam is letting people pay an advance charge at the time of the loan approval. It may happen this way: You see an enticing advertisement about money lending that promises loan approvals to anybody who can get hold of all the requirements. Desperate, you submit all the needed documents and loan information. The next day, a sweet-talking caller gives you the good news that your loan has been approved. But, in order for the loan to be fully released, you have to pay fees like processing fees, insurance fees, or three-month advance fee. The caller informs you that the payment must be wired immediately through electronic transfer. With your hopes on the loan approval, you pay the bill. You wait for days but the loan never gets to you. And that was it. You are scammed. This kind of scam is also common in housing loans where fraudsters use online advertisement of real estate.
Never send money to agents you never had an appointment to. Be sure to verify their identity and confirm their involvement with the company.
2. Loan Phishing Scams
Phishing is the act of falsely claiming to be a legitimate organization and asking the recipient to supply information such as bank account details, PINs, or passwords which are used to conduct fraud. This is usually combined with threat or request because an account will close, a balance is due, or information is missing from an account. Sometimes, fraudsters impersonate websites of known financial institutions and create legitimate-looking websites to attract people. Their goal is to get your personal information.
Do not give away the important details of your bank account as well as your personal identification data to somebody you do not know.
3. Distance/Schedule Problem Scam
In this trick, the present owner tempts you to the good-looking property and says he/she is abroad and showcase of property is not possible. He/she promises to mail the keys and other documents once you deposit the payment.
See the property yourself and walk away from the deal if the owner cannot show it to you.
4. Excessive Credits Leading to Impoverishment
The old, low-income workers, inexperienced, and unfamiliar people interested in housing loans are the target of this scam. The practices of predatory lending include attracting people to apply for mortgages with high interest rates and excessive fees. People then pay far greater than what they can handle which may end up in bad credit and losing their homes.
Know more about the lender and do not sign up immediately to the deal. Set your budget to control your money.
5. Title Fraud
This is a type individuality scam in housing loans and real estate where fraudsters pose as the title-holder of the home who use forge papers to shift the property to their name. Then, they get another secured loan in contrary to the possession, get the money, and run away leaving the owner of the possession accountable for all the payments.
Inquire from your home insurance agent about the title insurance and protect your personal information.
Also, be mindful of the following warning signs on loan scamming:
· A company/person asks for an advance fee to modify, refinance, or reinstate your mortgage.
· A company/person assures that he can stop a foreclosure.
· A company/person suggests you to pay them instead of paying to your mortgage company.
· A company/person pressures you to sign over a document, for instance in housing loan, that you have not read and understood.
· A company claims to offer "government approved" loan modifications.
We can sum up all the learning into three simple steps: Know it, Avoid it, Report it.
Maricor Bunal has been a Project Manager and Content Writer for a long while. Her passion in writing is her main drive in crafting articles that are engaging, informative, and meaningful. Her partnership with Loan Solutions PH has given her a whole new opportunity to take writing to a whole new level.
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