The most important thing an individual must keep in mind while banking is to avoid bank scams. Sometimes it may happen that you need a personal loan urgently but your CIBIL is not up to the mark. Generally, for approval of a personal loan the CIBIL score should be above 750. But if a lending institution is approving of a loan at a bad credit score then it may be a scam. You should totally avoid getting a loan from such kind of organizations or lenders.
What is a loan scam?
In this kind of bank scam, a lender gets ready to provide you a personal loan with your bad credit score or without inquiring much about you. Besides that, they will ask you to give the interest rates before providing the amount of loan. Sometimes they ask you to give the first EMI of your loan before sanctioning the loan. The moment you pay the EMI or interest rate in advance they will vanish with your money. Now a loan scam happens to you. You are always advised to inquire properly about your lender too.
Another Form of the Loan Scam
Loan scams can happen in another way too. Some lenders let you borrow money with a bad credit score. But the biggest consequence of this is they offer way too high-interest rates. For example, let us consider a bank is giving you a Personal Loan Interest Rate at 11% to 15% per annum. Then they will charge you a 50% rate of interest for the same amount of money. This is quite unwise to apply for a loan in these organizations. The reason after that is you will have to pay 3 or 4 times more than that of your principal amount.
Fraud in a mortgage loan
The scam can happen in one more form. The organization may ask you to give something like jewelry as a security of the loan. And after that, they run away. After some time you will realize that neither you got a loan nor your jewelry. And since the whole process was illegal and the company was a fraud so they are not liable to you in any way.
Precautions to Avoid Bank Scams
- Never give any kind of EMI or interest rates before getting the amount of loan.
- Always do research about your lender.
- Never go for non-reputed financial organizations.
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Special Note: An individual must examine the whole EMI amount payable to the lender with the Personal loan EMI calculator.