It is sad to note that there are some lenders who prey on needy students and add to their burdens by luring them into student loan scams. Most students fall for these scams since this is the first time that they get to deal with banks, lending, and their finances on their own. To avoid falling into the trap set by these unscrupulous organizations, here are some signs that you should watch out for:
Unsolicited emails or letters
Scammers send out emails or letters that promise loans that are quick, easy, and with unbelievably low interest. Usually they ask right away for your personal information such as your telephone numbers, bank account numbers, social security number, complete name and address, and other pertinent information. Responding to their request will lead to identity theft. Legitimate financial institutions do not request their clients to give out important information via email.
Request for advance payments
Be wary if your lender asks for advance payments, deposits, or your bank and check details. They usually ask you to wire the advance payments or deposits to money transfer businesses that are hard to trace. These advance payments are often required in conjunction with their guarantee that your loan will be approved despite your poor credit history or low credit rating. Legitimate lenders never guarantee loan approvals, much more request for advance payments before the loan is even given out.
Use of seals and logos
Fake lenders usually use seals and logos that are similar to those used by government agencies or popular banks. They do this to create a false impression that they are part or affiliated with the said agencies or companies. Before responding to their correspondence, verify with the bank or government agency. It is not enough to just check the website since this can also be faked and made to look like the legitimate business or government agency.
Scammers do everything to make you respond to their offers. Don’t give in to offers of promotions, vouchers, sweepstakes, and other “gifts.” Legitimate and stable businesses don’t aggressively pressure customers to take out loans even if it done through incentives.