loan companies

How To Make Sure Your Loan Company Is Registered?

Loan companies are a great way for people to get money when they need it. However, with the internet being an open place, many scammers take advantage of people in desperate situations. Here is how you can make sure that your loan company is safe. 

When you are looking to take out a loan, it is important to make sure to check if a loan company is registered, reputable and safe. In this blog post, we will discuss what signs indicate a legitimate loan company and how to find reviews on their services for your convenience. 

Not all traders are genuine

Some consumers assume that all traders are legitimate because they are approved and monitored by the government, but this is not true. While there are rules and regulations about setting up a business or company in Australia, authorisation to operate does not guarantee honesty. Some traders may even pretend to have authorisations or licences that they do not have.

Business cards, registration numbers or other forms of identification do not necessarily prove that a business or trader is legitimate.

If you doubt the credentials of a business or trader that you are dealing with, do some research and verify any information they provide. If you are not satisfied, it is better to deal with someone else.

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Check a company

Search ASIC Connect within the ‘organisation and business names’ search to check if the company is registered as an Australian company.

Remember that finding the company name on our register does not mean it is a safe or legitimate company to deal with. You need to do your own independent checks. Find out more about choosing investments.

If you want to keep an eye on what companies are doing, subscribe to ASIC’s free Company Alert service. You can enter the names of companies you want to watch, and you’ll get an email overnight to tell you what forms they’ve lodged.

Check if the trader has a permit or licence

Many companies, businesses, tradespeople and professional service providers need some sort of additional registration or licence before operating their business. These licensing systems help industries maintain professional standards and encourage consumer confidence.

You may wish to verify any information the trader gives you about their licences.

Check if the trader has any memberships

Professional or trade associations represent many industries. Membership of these types of associations is generally voluntary.

Ask the trader you are dealing with if they belong to an association. If they claim that they do, ask them for the membership or licence number. Then, contact the industry association yourself and verify the information the trader gives you.

If you are worried about the authenticity of a company, it is always worth checking they are legitimate before you engage with them.

Fraud is an ever-growing risk with big cost implications and can no longer be written off as a ‘bad experience’ within our digitally enabled world. In recent survey results carried out by the banking trade body, it was revealed invoice fraud cost firms almost $93m in 2018. They also stated that from their survey results, the average loss per fraud case was $28,000. It is no longer seen as an annoyance for companies to carry out due diligence and enforce compliance measures; it is now a core business issue that companies are stepping upon, and rightly so. 

Fraud is a reoccurring risk that can result in loss, so we look at how you can establish whether you can trust a company or should avoid them at all costs.

How to spot a loan scam?

There are warning signs that you may be dealing with a loan scammer rather than a reputable lender:

Requires an upfront payment. Scammers may insist you send them money before you get the loan funds. In some cases, there may be legitimate upfront fees for a loan (such as an appraisal for a commercial mortgage), but in most cases, these fees are bogus attempts to steal your money. The scammer will usually require you to pay by a method that’s difficult to trace and impossible to refund, such as wire transfers or prepaid cards. 

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Requests personal information but is not secure. This one is tricky because loan applications with legitimate loan companies often will require you to provide a Social Security Number (SSN) for a personal credit check and an Employer Identification Number (EIN) or Taxpayer Identification Number (TIN) for a business credit check. In addition, your bank account number may be required either to verify revenues or to facilitate ACH payments. Therefore, it is essential that when you are asked to provide personal information, make sure you are dealing with a reputable company and using a secure website. 

Loan approval regardless of credit. Scammers will often say you are approved for a loan even though you have a bad credit score and don’t meet normal qualifications. Most lenders will have some basic creditworthiness requirements, whether that’s based on personal or business credit. While some types of small business financing are available to business owners with poor credit, there is often a higher cost associated with these options.

Excellent loan terms for a new or struggling business. Most business loans require a combination of strong revenues, at least 1-2 years in business and good credit. If you have none of these qualifications, it is unlikely you will qualify for most types of small business financing. If someone calls you and promises financing at very low-interest rates regardless of your qualifications, you may be dealing with a scammer.

 

Frequently Asked Questions About Loan 

Is a personal loan guarantee legit?

PersonalLoans.com is a consumer site dedicated to matching those with bad credit to personal loans of up to $35,000. PersonalLoans.com is not a bank but rather a lender network. The site partners with reputable lenders across the country who are willing to lend to poor credit applicants.

Is a secured loan a bad idea?

Secured personal loans may be preferable if your credit isn’t good enough to qualify for another type of personal loan. Some lenders don’t have minimum credit score requirements to qualify for this type of loan. On the other hand, secured personal loans are riskier for you because you could lose your asset.

How do you know if a loan company is legit?

How to spot a legitimate loan company

  1. Check for contact information. A lender’s phone number, email address and physical address should be readily available on the website, even if it’s an online-only lender.
  2. Investigate online reviews. 
  3. Look at the Better Business Bureau. 
  4. Make sure it’s registered.

How do I know if I’m being scammed for a loan?

Signs of a Personal Loan Scam

  1. The Lender Guarantees You’ll Be Approved.
  2. The Lender Is Not Registered in Your State.
  3. The Lender Pressures You to Act Immediately.
  4. The Lender Does Not Have a Physical Address.
  5. The Lender Requires Upfront Payment.
  6. The Lender Reaches Out to You First.
  7. The Lender’s Website Isn’t Secure.

loan commpany registered

How to check if a loan company is legitimate

There are several ways to check if a loan company is legitimate:

  • Check out the loan company on the Better Business Bureau (BBB) website.
  • Do a quick online search and look up customer reviews.
  • Check with your state’s attorney general to ensure that the lender is registered with the appropriate state government agencies.

1. Check for an online presence

Before you do business with an online lender, do an internet search for the company name. (Tip: Try the “news” tab in google to see if the company has been mentioned in news articles.)

You can also lookup the domain name registration to see when a website was registered. This may help you spot a brand new site and may have been created for evil purposes. 

Loan brokers and loan companies must be registered in certain states. If they are, they will list that license information on their website. So look for it, and when in doubt, verify it. 

Most importantly, before entering any information on an online lender’s website, check for a padlock in the URL to ensure the site is secure. You can then click on the padlock to see if the security certificate is up to date. 

Pro tip: Never enter personal information or sensitive business information on a website that is not secure! 

2. Check with the Better Business Bureau

Even if the loan company has an online presence, that doesn’t necessarily mean that its operations aren’t predatory. Check the Better Business Bureau website to learn more about whether the lender is worth working with. You’ll typically see a letter grade from A+ to F, along with reasons for the grade.

In some cases, you’ll also be able to read customer reviews, which can give you a better idea of what to expect. If you find that the lender wouldn’t be a good fit, you can also use the website to find one that might be better.

3. Do a gut check

Lenders want your business, but they shouldn’t be desperate for it. If you feel like the person you’re dealing with is overly aggressive or manipulative, it might be a sign that they’re trying to fluster you and make you feel like you need to decide before you get all the facts.

If you feel uncomfortable about the process at any time, take a step back and consider why you feel that way and whether you should continue.

4. Check with the state’s attorney general

If almost everything checks out, but you want to be entirely sure, contact your state’s attorney general office or the state attorney general’s office in the state where the business is located. Lenders and loan brokers are often required by law to register with state agencies before doing business there.

 

Before signing the agreement, however, you should consider the risks that accompany certain aspects of these loans. Because most consumers aren’t skilled in the act of arbitrage, loans are almost always stacked in favour of the lender and not the borrower. If you seek a loan for a want rather than a need, consider saving for the purchase. If you decide to proceed with a personal loan, be sure you know the risks going in. Additionally, using a personal loan calculator to find the monthly payment, loan term, and interest rate you’re comfortable with can help ensure you know exactly what to ask for.

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