Tips on How to Avoid Payday Loans Scams

With the current economic conditions, payday loans have gained popularity with most people who need a financial boost. Therefore, it’s not a surprise to come across a scam within this lending category. For most borrowers, distinguishing between genuine financial providers from the unscrupulous lender can be quite a challenge. RealisticLoans.com is genuinely interested in the welfare of its users and we do our best to provide education in a bid to equip you with the necessary know-how of circumventing a scam.

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All payday loans aren’t scams

It would be wrong to say that all payday loans are scams since there are many genuine lenders who focus on giving legitimate payday loans. Nevertheless, this type of lending comes at a high cost and in most cases, this leads to people concluding that they are scams. Basically, the lender expects you to pay between $15 and $30 when you borrow $100 and this implies that the APR can easily be a three-digit figure.

Most people view them as debt traps which will easily get you into a never-ending cyclic debt. The fact that most cash advance loans are associated with high costs of lending, most borrowers have serious difficulties when it comes to paying back the cash. This means that many people opt for a rollover in order to repay the loan.

However, this doesn’t conclude that a payday loan is bad and instead, it’s a form of borrowing that may be applicable when you need to get cash within a short time.

Identifying a payday scam

While some lenders are in genuine business, there are some elements in this industry that are there to exploit careless individuals who don’t give sufficient thought to the offer they receive. Here are some ways you can identify a scam and stay safe.

No credit check lenders

Every time you come across a lender who says that they won’t check your credit scores, you need to run. Basically, a credit check is necessary because a lender will need it to determine your creditworthiness. The credit score speaks volumes when it comes to assessing your ability to repay the borrowed money.

If a lender shows no interest in your propensity to handle the repayments, they are probably not having your best interests at heart. Whenever you come across a lender who insists that your credit history isn’t important and that your loan application will be approved automatically, be cautious because a legitimate lender can’t offer guaranteed approval loans.

More often than not, the credit score determines how much interest rates you will be paying for the loan. And they also need to find out your history with other credit products.

Advance Charges

You don’t need to make any payments so that you can get a loan and any form of payment made to a lender before they offer you the cash is not legal. However, some lenders will request you to pay an origination fee but if a lender is genuine, they will deduct the fee from your loan.

If a lender asks you to make advance payments or present your collateral, you need to be wary. If you want to stay safe, cut communication with any lender who asks you to give them a prepaid debit card before your loan has been processed. If a fraudster realizes that you don’t know much about payday lending, they can easily fool you into thinking that you need to pay advance loan processing fees or provide for some form of collateral to compensate for your poor credit scores. Always keep in mind that any form of prepayment is in direct violation of the current federal laws.

Unsecured websites

Basically, if you want to stay safe online you need to make sure that all the lenders’ websites that you are accessing and making transactions with have the recent security certificates. This can be ensured by always checking if they have an https on the address.

If a lender is genuine, they will do everything necessary to safeguard the security of the lenders. On the webpage that you are using to submit the personal information should always have a padlock sign on it, if it is absent, just know it’s not secure from prying eyes.

Some unscrupulous lenders have integrated software on the pages and the main purpose is to capture the information as you input it. This implies that they can still have your data even if you choose not to submit the form. If your browser warns you that you have visited a site with security issues, you should exit immediately since most of these scam lenders don’t implement the required security features on their websites.

Lenders who lack a physical address or are unlicensed

As a rule of thumb, you should ensure that a lender has a physical location provided on their website. In addition, you should double-check to make sure that the location is real and that it exists. You could also dial a directory which can assist in verifying that the business is legit.

If a lender is operating a genuine business, they will have all the registration as required by the existing laws. As such, the lender should disclose the number of states where they are authorized to do business. The Federal Trade Regulator requires that all lenders be registered in every state where they conduct business. This makes it easy to regulate their operations and keep the borrowers safe.

Act immediately loans

Since most fraudsters realize that you may be in a hurry to get your payday loan, they may push you to act quickly in an attempt to defraud you. Generally, they will pressurize you to make you think you are in a do or die situation and you are enticed to submit your personal details as well as the associated advance fees.

Every time you are requesting a loan, take your time to go through the details of the loan to make sure you understand what is on the table for you. If there’s something that you don’t understand, the lender should be willing to provide additional information to your satisfaction. But if they become rude and pushy, it is likely that they are only interested in robbing you of your hard-earned cash.

Final words

For you to navigate through the lending process safely, it’s imperative that you learn how to identify and stay away from the scams. This also keeps your personal details from landing onto the fraudsters’ hands which can use the data to damage your financial profile. At RealisticLoans.com, you can get safe lenders who will give you the cash you need without getting you worried about the security of the transactions.