A payday loan is one of the easiest and fastest credits that you can acquire in Canada. The lenders extend their loan benefits to all citizens with a stable income source without considering the nature of their credit ratings. Most payday loan lenders are interested in their customers because of their financial terms to determine if they can repay the loan with accrued interests.
Most Canadian citizens resort to these types of loans, especially for those who cannot obtain bank loans due to their low credit ratings. It is possible to get the loan within hours after application, whether through their virtual sites or physical offices.
Due to numerous citizens opting for these types of loan scammers have emerged and pretending to offer the same terms as the legit lenders. It is often difficult to differentiate a transparent lender form scammers, and this article will provide you with warning signs you should look out for.
The lender is not licensed
All lenders in Canada need to have a working license from the governing authorities. The permit is a working permit, and it illustrates that the lender is adhering to the set rules and regulations set by the Canadian government. If you note that the lender does not have a license, it means they are not accredited to offer such services, and you should refrain from transacting with them.
Most of these unlicensed lenders are ghost workers and are often difficult to sue them in the future. But with a licensed lender, if a transaction goes wrong, it is possible to hold them accountable in a court of law.
Hidden costs and charges
Genuine private lenders like Lendforall or LoansCanada, are upfront about their interest charges. In applying for the loan, a suitable lender will give you detailed information about the fees they will charge you for the loan. But with the scammers, the costs are hidden and will only emerge after you have been granted the loan. Ensure that the lender is transparent in their interest rates and terms.
The deal is too good
Another warning sign is that if the loan terms are too good to be true. A credible payday loan lender will ask about your employment history and your current income status to determine if you will have the financial capabilities to repay the loan with the accrued interest. However, a scammer will not ask you for such details and promise to extend credit to you despite your financial struggles.
The lender is pressuring you to accept the deal
The process of applying for a loan should be optional, and the lender should not force you to sign or agree to any terms. Most scammers will put too much pressure on you to sign and accept the deal. For instance, they can insist that they have a discount on their interest, but you have to agree to their terms.
If you note that the lender is pressurizing you and using threatening tones, avoid such a lender. It would be best if you had the freedom to dictate the amount you want to borrow and the repayment schedule you want.
Asking for too many details
In the process of a loan application, the only required details are your identification details such as your identification identity card, full names, account number, and employment number. A lender should not request vital information such as secret codes and pins to your credit and debits cards.
Suppose you note that the lender is seeking such detail that is a warning sign that they are not legit. In some cases, they will use those details to extract money from your bank accounts illegally or using your information for fraudulent activities. It would be best if you were cautious, especially when transacting online to avoid losing your hard-earned cash.
Bottom Line
Most scammers take advantage of lenders and promise to extend payday loans to them but end up scamming them their savings. If you consider applying for loans through various virtual sites, ensure you can identify the above warning signs. You can also check for the credibility of the lender through online reviews, ratings, and testimonials. If the transaction history of the lender is questionable, avoid transacting with them at all costs.
Disclaimer: This content does not necessarily represent the views of IWB.