Personal Loan Scams

Personal loans are a great way to make money for a wide range of needs. Banks, loan companies, private investors, and online lenders can all give out these kinds of loans. It's important to know about personal loan scams and how to stay away from them. In the United States in 2000, this kind of scam was ranked #5. Each person who was scammed lost an average of $464. Because of this, the Federal government has been doing a lot to teach people how to avoid these kinds of scams.

The most common way to take your money and run is through an advanced fee personal loan scam. Most people who fall for this kind of trick never tell the police because they are ashamed that they fell for it. The victims are also angry. They must have needed money, or else they wouldn't have asked for a loan. They have less money now than when they started. People who do report the scam are often frustrated because the scammers are rarely caught and brought to justice. It is very important that you report any scams like this instant personal loan with advanced fee. If you don't, you're giving the predator more chances to hurt other people.

People who need a loan badly, are too trusting, don't know much about money, or have bad credit are the ones who fall for advanced fee personal loan scams. More than half of the people who take out an advanced fee personal loan are younger than 30. The lender tells the applicant that they are sure they can help them, but there is a fee for processing the loan. This can cost more than a hundred dollars. With the technology we have now, scammers often have websites and even 800 numbers for you to call. They will send you official-looking letters that you won't think twice about.

When you hear the stories of people who fell for these scams, your heart will break. One woman had lost her job and was about to be kicked out of her apartment. She got a new job and tried to get a personal loan to pay the rent. She gave the lender almost all of her first paycheck to cover what they called "processing fees" for a loan they said she could get. She was upset when she was kicked out of her apartment and found out that the lender had taken her money.

Be careful who you try to borrow money from so you don't fall for scams like "advanced personal fee loans." Make sure they are a company you can trust. Check with the Better Business Bureau if they are an online business. Make sure you type in their business name exactly as it appears on the list. A common part of this scam is to use a name that sounds a lot like that of a real, reputable lending company that applicants may already know.

If you have bad credit or no credit, you shouldn't believe something that sounds too good to be true, because it probably is. If you have bad credit or no credit, you may have to pay a higher interest rate, but you should never have to pay any fees up front to apply for or process a loan. Some personal loan scams will call the fees you pay the first month's payment or a high-risk deposit. Applicants need to know that there is nothing like that. In fact, a lender must give you access to the money for at least seven days before they can take the first payment. The Federal Trade Commission is a good place to find out if any fees a bank charges are legal. If you are having trouble paying your bills, don't go to a lender for help. Instead, talk to a reputable non-profit credit counselling service.