When looking for quick borrowing options online, it can be difficult to tell if the lender you’re considering is legitimate or a scam. You’ve likely come across a deceptive website or a lender making promises that they cannot keep.
Scammers often take advantage of your urgency for fast cash, bypassing your usual caution. They might put pressure on you to make decisions quickly, which would leave you with little time to go over the contracts in detail. But fortunately, there are easy ways to find a reliable lender.
If you’re looking for the best online loans, it’s important to start by finding genuine online lenders. Here are six simple checks to help you avoid loan scams and find the right lender.
1. Start With the FCA Register
The Financial Conduct Authority (FCA) is the UK’s official body overseeing financial services, and all legitimate lenders are authorised by the FCA. Some websites may claim to be FCA-approved, but it’s important to verify this yourself.
To check, visit the official FCA register and search for the company. Then, click to view the website and contact details listed there. If the details don’t match, there is a big chance you’re dealing with a scammer.
2. Don’t Trust Marketing Calls
If a lender contacts you, it’s best to remain extra cautious. A genuine lender often doesn’t cold-call people with surprise offers. Even if they say they are from a reputable company, scammers often impersonate real companies to gain your trust.
If you receive such a call, type the lender’s name into Google to see if they have appeared in any scam-related news stories. Check online to see if anyone else has received a call from that specific lender. This will help you determine whether the offer you received is genuine.
3. Don’t Fall for Upfront Fees
Scam lenders will often claim that you’re pre-approved and you’ll receive cash instantly. However, genuine lenders usually do not hand out loans unless you can afford them.
A responsible and ethical lender will consider your income and credit history to determine whether you can repay the loan, as well as any upfront fees. It is normal for your repayment amount to include some setup fees. However, no genuine lender will request them upfront.
4. Look for Clear Contracts and Sensible Language
You don’t need a law degree to understand your loan agreement. If the loan terms are vague, inconsistent, or missing altogether, or if the whole process feels rushed, that’s a warning sign.
A genuine lender will always be clear about what the loan is going to cost you, the interest rate, the repayment schedule, and if there are any other fees involved. They will also give you time to read everything properly before signing anything.
5. Protect Your Personal Details
When dealing with a lender, you must provide certain personal information to complete a financial transaction. However, no lender will ask you for your card PIN, banking passwords, or security codes.
This information should not be shared with anyone, whether over the phone, by email or a form. Scammers might tell you that they need these details to verify your identity or speed up your application. If you feel that something is off, you should connect with the lending company using their official phone number or email address.
6. It’s Easy to Contact Genuine Lenders
When you’re working with a genuine lender, you’ll find it easy to connect with them and also find them forthcoming with a lot of details. An honest lender will want you to understand what you’re signing up for and put everything in writing as well.
You should be able to find their customer service details easily, and with genuine lenders, you will be able to talk to humans instead of automated messages. Another red flag is if they insist on communicating only via text messages rather than speaking on the phone, as this makes it more difficult to track or verify communication if something goes wrong.
Summing It Up
It’s very important to find the right kind of help when you’re in an emergency. Unfortunately, there are many scammers who want to take advantage of people in a vulnerable situation. If at any point during the transaction, you feel that something is off, it’s better to find a different lender that can offer you the support you need.
Once you know what red flags to watch out for, you’ll find it easier to complete the process, and you’ll be able to borrow with more confidence. An emergency can happen to anyone. It’s how you handle it that affects your future. You don’t want the fix for your emergency to cost you more in the long run.