Loan Companies

Check the legitimacy of a company before you borrow a loan

Bad credit score, unstable income and bankruptcy history now hardly matter while applying for a loan. There are plenty of loan companies available these days and you can solve your entire monetary problem with a blink of eyes with such companies. Sometimes the situation is so urgent that you even don’t have time to bother about the company’s background to apply for the loan. Although there are legitimate companies, yet the number of illegitimate companies is much higher than the legitimate ones.

It is always suggested to check on the loan companies with which you’re dealing for urgent loans. The tempting ads and websites related to loans draw the attention of people, especially who have bad credit score. As a result, people often become the victim of fraudulent transaction when they are in dire need of money.

Tips for you to crack the legitimacy of loan companies

So, here are few tips which will help you in distinguishing between legitimate and illegitimate loan companies and check if the loan company is really genuine.

  • Check the physical address - Before dealing with any Loan company make sure you check the physical address of the company. If you don’t find a street address, instead there is a P.O. Box address, then keep your ears and eyes open. However, to make this thing more evident, check the address on the Google Maps. This will give you a clear picture of the company’s existence.

  • Check the phone number - After the address, the next thing you need to check on is the phone number of the loan companies. Dial the available number and if you get the sound of an automated touchstone system instead of the voice of any real person, then keep yourself away from such a company. There are also companies that don’t provide any phone number at all. A genuine company has representatives who are there to answer the queries of the customers.

  • Check BBB accreditation – Check whether or not the company is accredited by Better Business Bureau (BBB). It is simply the best option to check the legitimacy of a loan company. So, make sure you work with a BBB accredited loan company.

  • Check company’s reputation - If any company has a history of scams, you will come to know about it by visiting the websites like Ripoff Report and Consumer Affairs. A database of complaints regarding the company will be provided to you. This way you will be able to track the scams and fraudulent activities related to different loan companies and can erase them from your preference list.

  • Browse the Internet - Just type the name of the company on your favorite search engine and watch out for information provided. You may also find the views of people who might have dealt with the company and their experiences, both good and bad.

  • Consult with an attorney - An experienced attorney who deals such matters may give you a clear hint about the legality of the terms and conditions offered by different loan companies. This would, to a great extent, help you in deciding if the company is authentic.

These were few tips which you can follow on your part to check the legitimacy of the loan companies. This will be of great help to you as you will be able to filter out few names from your list of preferred companies.

Few signs from FTC to keep you alert

Here is a list of signs of fake loan companies. As per Federal Trade Commission (FTC), the points mentioned below are red flagged. A customer must check them to avoid being the victim of a fake loan company.

  • No interest in your credit history: Loans are offered these days by many small and big companies for various reasons. Generally, a lender wants to know about the credit score, but if you find them showing least interest in your credit profile, it is suspicious and you need to stay alert.

  • Undisclosed fees: Many Loan companies assure you that your loan has been sanctioned and all you need to do is to pay a fee of minimal amount. Make sure that you don’t fall prey to this system. At the same time, there are other legitimate companies who ask for fees, but they get it deducted from the loan they offer. Make sure you don’t leak any information regarding your bank account number, social security number etc. before checking the legitimacy of a company; otherwise your bank account may be used to pay a hidden fee.

  • Phone loan: Never believe on phone calls from loan companies as this process is illegal in USA. They may ask for fees before delivering the loan. So, don’t get entangled into such a hassle.

  • Unregistered lender in the state: As per rule, lenders and loan brokers must register in the state where their business resides. So, this make you job easier as you can call the state Attorney General’s office and state’s Department of Banking and Financial Regulation to check if your preferred company is registered. This way, you would be able to distinguish between genuine and fake companies easily.

In a nutshell, be very careful while dealing with loan companies. Don’t fall prey to their slick promotion and tempting ads on newspaper, radio, television or internet. The crooks these days are smarter than you think and are ready to fool you at every possible step. So, before involving in any money matter with a loan company make sure that you follow all the above mentioned points and stay alert.

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