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With the boom of Web 2.0 in 2004, the
hype still continues with the emergence of the so-called
online loan. Through this, many people can now borrow
money over the Internet bypassing conventional banks. In
countries where lending money is difficult to access,
this type of loan is already becoming hugely popular.
People rejected by relatives, lending companies, banks
and other credit sources are now turning into this
Internet lending trend. With all the long lines and
faxing requisites, you can now apply loan at the comfort
of your home. Seemingly,
online loan has its share of benefits aside from fast
cash. The waiting period isn’t too long since it is an
online transaction. It provides financial support that
can range from home improvements and even to a travel
trip. Loan can also be used to venture in a small
business or to pay high interest rates of credit cards.
It is truly convenient, giving you alternatives whether
through cheque or direct bank deposit and the repayment
can also be automatically deducted from your own bank
account. First online loan only guarantees a limited
amount but with prompt repayment record, succeeding
loans may be increased. |
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But with the rampant online loan
sites all over the web, it is also linked to some scams
and frauds. These are “too good to be true” emails or
postal letters that will eventually ask for your
personal financial information. Even ads from TV,
newspaper or other promotion that suggest advance-fee
loan can be possible loan scammers. As you respond to
the ads or email, you’ll be directed to contact their
“consultant” and during the conversation, your “loan” is
definitely approved. After that, you will be instructed
to go to a website and type pertinent information.
Lastly, the person will be asked for a down payment or a
fixed advance deposit either by sending it through Money
Gram or Western Union and before you know it, you are
already a victim of loan scam as you never acquire a
loan and worse, the scammer departs and takes your
advance payment.
There are actually guides on avoiding
online loan scams. One is to avoid giving any personal
financial details that contacts you not unless you are
confident with the company. This personal financial
information includes social security number, name,
telephone number, bank account number and credit card.
Usually, legitimate companies don’t ask for advance fees,
as applications fees and other charges are usually
deducted from the amount on loan. In USA and Canada, it
is even illegal to make a phone call and do business by
phone, promising a delivery after an advance payment.
Aside from that, never trust wire transfers such as
Money Gram or Western Union, as legit lending sites
never use those payment transfers, or if you are in
doubt, personally call the company to verify who you are
dealing with. Scammers usually use big company names to
deceive others. You could also report an online loan
scam.
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