There comes a time when we might need some extra money. This is true no matter if you are a normal office worker or self-employed. The reasons could be for debt consolidation, business, travel, marriage, home renovation, etc.
This is where personal financing becomes a valid option. However, some people have taken advantage of the large demand to come up with scams. Knowing the warning signs will protect you from falling victim to such schemes.
To know if a personal loan is legit or scam, be on the lookout for these warning signs:
1. Your credit history doesn’t matter
We often see personal loan ads with captions such as “blacklisted can apply” or “no hassle – fast money guaranteed”. Offers such as these are too good to be true and need to be approached with extreme caution.
Applicants who have been blacklisted by financial institutions will have that information displayed in their CTOS credit report. Legitimate sources will only approve a loan after they have assessed borrowers’ credit history and confirmed the validity of information on the application form.
2. Involves a deposit
One of these scammers’ favourite methods involves asking you to pay a deposit or upfront fee. They will come up with a bogus reason for this payment. It can be something such as processing fee, agreement fee, bank payment, etc. Some will even say the payment is due to your bad credit health.
After you make this payment, they will disappear from the radar. You, on the other hand, will never see a single cent of your personal finance. The reason is your application was never sent to the bank for processing.
3. Presses you to act immediately
There’s a common sales tactic called “Fear of missing out”. However, scams usually seek to capitalise on this technique on an extreme level. They’ll say it is a one-time offer or you have to act now if you don’t want to miss interest-free instalments. Therefore, will press you to give personal information or send money before getting any paperwork done.
Don’t fall for this trap! Make sure you are in a clear mind and have read all the fine prints. Always insist on the paperwork before you apply for the loan.
4. Questionable procedures
A normal loan application usually requires you to submit documents such as copies of NRIC, latest three months validated salary slips, EPF statement, etc. Sometimes, you’ll receive a phone call or text from scammers claiming to represent a personal loan from a bank. They will claim that no documents are required. After a while, they will claim that your application was approved and you will need to pay a small fee before the money is credited into your account. They will claim this fee will be refunded immediately. This is also a scam. Do not fall victim!
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