What are scam loans and how to avoid them?

Daily, one in three people is a victim of scam loans. Because the acquisition of products and services has become a common event, the percentage of people who have misleading loans has skyrocketed, and millions of euros are lost every year.

It is difficult to detect loan scams because we do not have any physical entity to judge, or contact with previous clients. However, you should not worry, here we explain what the scam loans are and how to avoid being the future victim of one.

What are scam loans?

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As the term itself indicates, scam loans are loans offered by companies, typically online, that are intended to scam the customer.   Whether they are looking to gain the power of your own money (charging commissions and fees) or with your bank information. These scammers attack people indiscriminately, and finally do not borrow any money.

There are many ways to identify a scam loan. Keep in mind that these signals are not easy to detect. So always be alert when contacting a lender. Situations such as not asking for a credit history, not having a recognized track record or not being legally established, are some of the signs that you should not overlook.

5 councils to avoid being scammed with a loan

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Detecting deceptive loans is sometimes a difficult task, especially through the internet. But there are ways in which you can avoid being scammed and keep your financial security in place.

Do not give valuable information

When you are contacting a lender, never expose valuable financial information, such as your credit card number, bank account details, or your social security number. Always make sure that the entity is legitimate and operates within the limits of the law, especially if the procedures are carried out through the internet.

Do not pay in advance

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The scammers are impatient. They will want to get your money as soon as possible and disappear. If the lender requires you to make payments on commissions and interest in advance, or before the loan is approved, it is a scam loan.

Search opinions

It is possible to find opinions about the services of many lenders around the internet. If it is a scam loan, you will probably find many articles in forums or social media about the experience of other borrowers and warnings. Or in the case of not finding any additional information, it can also be a scam loan.

Contact a representative

It is possible to detect a scammer by the way it unfolds. Contact the representative of the lender and judge their professionalism, knowledge and patience. You may be able to identify strange behaviors.

Do not access suspicious links

If a lender calls the phone or sends an email offering its services, it is a scam loan. The advertising methods used by legitimate entities do not include any of the above, and you must take special care when accessing the website through a link provided.

Search for legitimate entities

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The government of Spain encourages people to use registered services. These loans are more difficult to obtain, but you will ensure your financial security and also enjoy lower interest rates.

Avoid being a victim of scam, know the opinions of the best online loans.