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Payday Loans Scam

Unfortunately there are many scams and rip offs associated with payday loans. Most payday lenders are honest and law abiding but there are predatory lenders out there who payday loan scams to swindle borrowers.

Everybody who seeks a payday loan should be aware of payday loans scams and how they work. A little knowledge about these scams can help a person avoid getting ripped off.

The way to avoid being a victim of a payday loans scam is to become an informed borrower. Just a little basic knowledge and common sense will help a borrower avoid these scams.

Some Common Payday Loans Scams

The most common payday loans scam is to tell the borrower they are getting a lower interest rate but charging a much higher interest rate. Many borrowers find themselves paying two or three times as much for the loan as they thought they would.

The way to avoid this scam is to read the loan agreement including the fine print. Don’t believe what the lender tells you or the claims they make in their advertising. Instead take a look at the agreement and always read the fine print.

A similar scam is to tack a “fee” onto the loan that the borrower will have to pay when the loan comes due. One scam is to start charting extra interest and late fees the minute a loan becomes due. If a borrower takes out a loan at 3:00 p.m. the lender starts charging late fees at 3:01.

Taking a look at the contract can help a borrower avoid paying extra fees and interest they don’t want.

Online Payday Loans Scams

There are also some nasty online payday loans scams that borrowers should be aware of. The most common are fishing and identity theft scams.

In a fishing scam a crook masquerades as a lender in order to get people to send them banking information and identification data. The bad guys want your banking information so they can steal money from your account. Criminals want identification data so they can use your identity to commit other crimes in your name such as taking out loans or opening bank accounts.

The way to avoid fishing scams is to only do business with legitimate online lenders. Be wary of any lender that makes offers that sound too good to be true. For example loans with fantastically low interest rates or offers of large amounts of financing.

Never respond an e-mail offer of a loan because such e-mails maybe sent out by crooks. You should also be careful when you see e-mails that claim to be from your lender. Many criminals will pretend to be your lender in an effort to get you to send them your banking information. Only enter information at the website of your lender.

Too Good to Be True 

Everyone who is seeking a payday loan should remember the old adage “if it sounds too good to be true it probably is.”

If a payday lender has an offer that sounds too good to you such as a really low interest rate. There’s a good change the loan offer is a front for some sort of payday loans scam.

Never do business with a lender that is dishonest or makes claims you know to be false. Doing business with an honest lender might cost more but it will keep you from getting ripped off by a payday loans scam.