In South Africa, loan scams are on the rise and consumers have lost millions of rands due to fraud.
Since well people are losing their jobs, they turn to run to personal loans to survive this pandemic.
At the same time, loan scammers also come up with creative ways to scam unsuspecting loan seekers of their hard-earned money.
So today I want to show ways you can easily spot a loan scam and be safe.
Always verify the lender or credit provider is registered to operate the business in South Africa.
And it’s simple.
All credit providers in South Africa must be registered with the National Credit Regulator (NCR).
Visit the credit providers page and search the name of whoever you want to apply for the personal loan with.
If they’re not listed, please run away because you’re likely to be scammed.
No Credit Checks
In South Africa, there’s no such as no credit check loans.
Each lender must be interested in your payment history and credit rating score. Whoever shows no interest in your credit check, just know it’s a huge red flag with a high chance of being a loan scam.
Whether it’s a secured or unsecured loan, your credit is very important in the process of borrowing money.
Usually, these kinds of loans are offered at excessively high-interest rates and negatively affect your credit score profile.
So no matter how desperate you are, always stay away from the no credit checks loans because you’re going to have a difficult time repaying the loan.
Another common red flag for spotting a loan scam.
The moment a lender asks for upfront payment to secure the loan, please do not fall for such tricks.
Lenders are supposed to include any additional fees in the terms of the contract of the personal loan agreement. The customer has the right to see all the charges and terms before agreeing to the loan.
No Physical Address
The official details of any company or lender are captured in the NCR database.
Use the information to check against what they have on their website.
If the company lacks contact information, then you must know you’re up for a scam ride.
Always do some research about the business before getting in communication with them, find reviews on Google or Hello Peter.
As indicated earlier, your payment history and credit score determine the approval of any personal loan application.
If the lender promise you guaranteed approval, you must it’s too good to be true.
Your application will go through necessary credit checks and affordability assessment, as obligated to do so by the NCR.
No lender shall over-indebt customers. They work closely with credit bureaus to get your credit report and understand the type of a borrower you are.
So there are no such as guaranteed loan approvals – it’s a perfect sign of a loan scam in South Africa.