How to Avoid Scams When Choosing Money Loan App
What Is a Money Loan App?

A money loan app is simply an app used to borrow loans, like to borrow$50 instantly. The loans can be payday loans, personal loans, or any type of loan you wish to get. They are easy and convenient to use as the application process is simplified and the instructions are easy to follow.

A money loan app can also be a great way to manage our finances as it has a dashboard that shows the time when the loan will be due, the amount to be paid, and the interest incurred. It also has reminder notifications to remind us of the payment date.

It's a good idea to look for the best money loan app that offers low interest and has an easy loan repayment process. It's possible to get fast money within a few minutes from an instant money loan app. They have quick responses and money approval.

Despite the many benefits the loan money app offers, they are susceptible to fraud cases. Their popularity has attracted fraudsters that con a lot of people as the above figure suggested.

One report shows that the Federal State Commission in the United States received 2.8 million fraud cases in 2021. This figure increased by about 70% more than the cases in 2020. This figure is still rising even in 2022.

It's important to know which loopholes the fraudsters are using to scam people and avoid them, especially when using money loan apps.

How to Avoid Scams When Using the Money Loan Apps
 

1. Ensure That the App Is Registered

They are numerous money loan apps currently and possibly some of them are not legit. Before using any app, make sure that it is legit and licensed by the national authority. All money apps are required to be registered in the states they conduct business by the Federal Trade Commission.

Hence, it’s important to find out if the lender you are dealing with is registered to conduct business in your state.

2. Look for What Other People Are Saying About the App

If an app does not have any reviews, it is wise to avoid them. When choosing a loan app, look at other people's reviews, both positive and negative. Look at the star ratings. High-rating apps are great to use.

You can also ask for info from your friends and family if they have used them in the past. Ask them about the benefits of using the app and the challenges faced.

3. All the Loan Info Should Be Listed in the App

One of the most important factors to look out for when choosing a loan lender is the interest rates. These rates should be listed in the app. If any other possible fees can arise during the loan application such as the origination fees, prepayment fees, or late fees, they should all be listed in the app.

The lender should also list out the requirements needed for loan approval and the measures taken in case a borrower defaults on a loan. All this info will help the borrower make an informed decision on whether to apply for the loan or not.

4. Be Cautious if the Lender Guarantees Loan Approval

Before loan approval, the lender has to go through a screening process to determine if you are eligible for the loan or not. There is some info needed which includes:
•    Your name
•    Individual income
•    Employment status
•    Contact information
•    Place of residency
•    Your national ID

The lenders will take a look at your credit reliability. A good credit score should be over 700. With a good credit score, you can get favorable terms including low interests and favorable repayment terms. However, it’s important to note that payday lenders don’t look at your credit score but they’ll still have a screening process to verify your documents.

Hence, if you find an app with no screening process but guarantees approval, run away from it.

5. Take Note of How the Lender Reaches Out to You

There are many cases of scammed people who were called by the "loan lenders" and asked for their PIN or to provide some personal information for their loan apps. Those people normally pretend to work in the loan company and disguise themselves as customer service who are willing to help you make some adjustments in your account.

One thing to note is that no loan lender can call you asking for a PIN. Also, there are official phone numbers that the lenders use in case they need to call you. These numbers are listed on their official website.

Be aware of the emails asking you to apply for the loan using a certain link. Those are possibly scams. Do not click on any links if you are not sure that they come from a reputable source.

6. Be Aware of People Who Ask You for Money for the Loan to Be Approved

Some people ask you to pay some cash for faster approval or claim that the info you gave is incorrect and for you to be approved despite the incorrect details, you have to pay some cash.

There was a time someone called me claiming that the phone number I used was incorrect and that I could easily be sued for that. So, to avoid that situation and ensure loan approval, I had to pay extra cash. That was a scam and I'm glad I identified it early enough.

Other scammers will tell you that you have won some cash or a prize and for you to get that prize you must send some money for transportation. This is a big red flag that you should run away from. If you have truly won some cash, the lender will not ask for any money and they will call you from their official business number.

7. Run Away from People Who Claim That They Can ‘Flip’ Your Money

Some ‘lenders’ will tell you that it’s possible to increase your loan amount by 50% if you send them some funds. Others will ask for funds to reduce your interest rates. There are a lot of ways that scammers use to get money.

In short, never send any money to a lender before getting a loan. The only money you'll pay is the interest rates, fees involved plus the principal which will be paid when the due date arrives.

Conclusion

Despite the rising number of online scams, it's possible to avoid such cases by identifying the loopholes that scammers use. You can as well ask around to see how other people were conned and take their advice.