It is important to check the lender’s credibility to ensure that you are dealing with a trustworthy institution. Here are tips that can help you assess the credibility of the lender:
No Contact Information or Physical Address
A legitimate lending company will have a physical address and contact information. Therefore, be wary of lenders that do not share or withhold their addresses and contact information.
Aggressive Sales Tactics
Avoid lenders or lending companies that are aggressive and use high-pressure tactics. This includes lenders rushing you to get a loan, signing a document without explanation, and encouraging you to borrow more. The same is true with companies that do unsolicited phone calls, emails, and text messages.
Upfront Fees
Be wary of lending companies that require advance payments or upfront fees before getting the loan. Legitimate lenders would charge the fees as part of a repayment plan or deduct the fees from the loan amount.
Lack of Transparency
Reputable lenders provide clear and transparent information about their loans, terms, fees, interest rates, repayment schedules, and loan conditions. If the lender is hiding information or unclear with them, then it is a huge red flag.
Unusual Interest Rates
Be wary of unusual interest rates. Legitimate lenders will never charge way higher than the market average. If the interest rates are way lower than the average, then they might have hidden fees or deceptive loan terms.
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