Personal loans are a great way to ease your financial stress when you have large payments looming over your head. You can repay the loan in small instalments over a few months. alex.bank – personal loan is fast, simple, fair, and human. With a high level of digitisation, automated credit scoring, paperless processing, competitive rates, and transparent loan processing and disbursement, you can make sure that your unexpected financial crunch is easily covered.
The total value of new personal loans in Australia in August 2021 was a whopping AUD1.444 billion. There is a constant risk of getting involved with the wrong lender with so many lenders out there. Here is a list of potential red flags that you should look for and avoid when getting a personal loan in Australia.
No Credit Check
When lenders do not run a credit check, it should ring alarm bells in your head. Any genuine institution will always run a credit check on a potential customer to make sure they can repay the loan. Avoid sharing personal information with such lenders, as they are bound to be running a loan fraud. Therefore, if a lending institution is not doing this, you should immediately start looking for another one.
Ask You to Pay Upfront
If a banking institution or lender asks you for an upfront payment for processing and approving your loan, you should think again. It could be an indicator of shady business practices. They could disappear after collecting payment from you, leaving you in a deeper financial crisis.
Accredited lenders do not ask for any payments to process your loans. They will look at your ability to repay the loan and your credit history to approve your loan. These banks don’t need any processing fee upfront, either. It is included in your monthly payments.
Stay Away From Unsolicited Calls and Emails
Lenders will not contact you directly for a personal loan unless you have applied for one and been through the screening process. So, you need to get alerts if you start getting calls and emails soliciting you for personal loans without sending out any inquiry.
Phrases like “guarantee” and “offer ends soon” are some of the most obvious red flags that you should watch out for. An authentic lender will not guarantee a loan unless they run a few checks like credit, income and expense, and ID verification. Also, lenders rarely give out seasonal offers.
Choosing options like the Alex.bank – personal loan can be your go-to for reliable and safe personal loans. They also offer competitive rates and comfortable repayment options.
Does Not Provide Complete Loan Details
When the loan offer does not include the details such as the various fees, how frequently the interest is charged, and the final monthly payment, including any taxes, it is bound to be a fake offer. Lenders have to provide you with all the details before you sign the agreement.
A reliable bank gives you the complete details of the loan in detail before you sign the agreement. They will help you choose the ideal repayment plan that suits your budget and financial situation best. This helps you eliminate any unexpected financial burdens in the future.
Does Not Mention Interest Rates
This is another thing that lenders will never do. They cannot offer loans without mentioning the interest rates of the loan. So, if they don’t mention it or avoid your questions about this crucial detail, it could be a red flag that this is a fake offer. This could turn out to be even more expensive than you think it will be.
Avoid being involved with such lenders, who would not provide you with all the information about the loan in one go. Any genuine bank or lender will always tell you everything there is to know before signing the agreement.
Many loan scams are designed for data theft. They offer immediate loans without any credit check and ask you to update your personal and financial information. When you have entered sensitive information, you are directed away from the website, and your information is in the hands of hackers.
One way that you can ensure that the lender is genuine is that their website is secure. This means that it has a Secure Sockets Layer (SSL) certificate. When you visit a website, the prefix on their website address must be “HTTPS” instead of only “HTTP.”
Assured Loan Approval
This is a sure sign that you are being scammed. Lenders will only approve loans that meet certain requirements in terms of credit scores, ID checks, income, and expense checks. The lending bank needs to be sure that you will repay the loan in time and will not get into a worse financial crunch than you already are. Therefore, when you find words such as guaranteed or assured loans, you need to stay away from them.
There are scammers out there who will fake their affiliation with accredited financial institutions. These are tricky to spot as they copy most of the information to appear genuine. It is still best to check if you are dealing with the institution itself or with an affiliate.
In the case of an affiliate, do some digging and verify the connection before proceeding. You pick up the phone, call the company they claim to be associated with, and confirm the truth. These scams are again another way to steal your sensitive information.
Generic Email Address
You have placed an inquiry about a loan and received a response via email. The email looks professional, and the logo appears to be right. However, the email is from a generic email address.
In such cases, it is a definite red flag. Professional, accredited lending institutions do not use such generic email addresses to send out official communication. They will have their email address with the company’s name either in full or short, followed by .com or .au. Anything else, and you will be in trouble if you share any information with them.
The key is when in doubt, go with your instinct. It is best to stick to reputed institutions and try getting a loan like the alex.bank – personal loan.
Personal loans can come in handy when tiding you over the little rough financial spot that you experience once in a while. There is no harm in borrowing to meet unexpected expenses. Watch out for the above red flags when looking for a bank.