Larger lending organizations, such as banks, are excellent for conventional loans. Yet, when it comes to meagerer amounts or alternative lending solutions, banks normally do not support the requirements of the proposed borrower. This is where remote lending or hard money lending companies are helpful.
Many lending businesses are very trustworthy, and they provide great customer care as well. They give reliable loan tips that are very useful for people who are seeking a loan but have no previous experience. They are excellent for people who are thinking of a start-up business. But the problem is that there are many fraudulent lenders as well. How can you know which lender is legal and which is not? Well, here is a list to find out if a remote lending business is legal.
- There is no physical address
All lending businesses should provide an actual physical location. You should look it up on Google Maps, to find out if it’s valid or not. Sometimes, businesses that are running lending scams will post an address that is in reality an empty lot, so you must verify the actual physical location of the company. If there is no proper physical location, you should rather avoid the lender business. Many dishonest businesses are not traceable to help them dodge any legal consequences.
- Demanding prepaid card
Some fraudulent lending companies are famous for demanding prepaid debit cards from the customers, maintaining that they require it for legal insurance or collateral fees. This is a fraud. Genuine lending institutions might charge you a fee for application, approval, or cash report but all these charges are taken out from your loan.
- No registration
The legal customs of nearly all countries around the globe require the lending businesses to register themselves in the areas where they carry out their business. You should always check the website of the lending company that you have considered, to check out the list of places where they conduct business legally. If the company that you are interested in does not have any registered areas or countries listed, this means that they are scammers and you should avoid them.
- Not demanding your credit history
Reliable remote lending businesses make it clear, from the start, that they will need to have a look at your credit history. The purpose behind this step is to ensure whether you have a reputable history of paying all your bills on time or not. This is done to confirm that you will be careful about paying your loan on time.
Scammer businesses will not be interested in your creditworthiness, of course as they are scamming you. Fraudulent businesses try to get high-risk borrowers because they will more easily fall behind on payments and get exclusively high late fees and fines. Although, fraudulent companies might still ask about borrowers’ income, annual worth, and other credentials.
After all the precautions, if you somehow still get trapped, immediately notify your local police department about the fraudulent company, and file a report as well. They might not be able to catch them but they’ll put an alert on your credit reports and file an insurance claim.