Private Loan Scams: How to Identify Them from a Mile Away

• September 24, 2017

Personal loans have continued to increase in popularity throughout Canada. They have provided an awesome avenue for individuals who don’t want to face the banks or other financial institutions for one reason or another, to get financing.

However, their popularity has also given rise to private loan scams, and it is imperative for every applicant to be cautious of these scams, especially if they are dealing with private lenders found online.

Here are some of the ways you can use to identify such scams from a mile away:

They don’t care about your credit history

In as much as it is possible to get bad credit loans from private lenders, they will always pull your credit history. If you meet a lender claiming that your history is of no concern to them or if they will not be pulling your credit report, then know that they are not interested in giving you any money, and that continuing to interact with them, will be a waste of time.

The lender is not registered in your province

With the advent of internet and technology, any scammer can patch up a site overnight, and claim to be offering online loans. Before you engage with the online lenders, take your time to find out if they have a physical location, and if they are duly registered as lenders in your province. A quick visit to the department of banking or chamber of commerce in your province, will give you all the information you need about their authenticity as lenders.

They need a prepaid debit card

You should not pay anything to be given a personal loan. Scammers may ask you for a prepaid card for collateral, insurance or some kind of fees. Just know that when the card lands in their hands, it cannot be traced, and you will lose your money. If a lender asks for the card, simply terminate the negotiations.