What are loan scams and how can they be identified?

Loan scams are fraudulent loans that are offered under false pretenses, often using tactics to hook their targets such as promising big returns or hiding the actual cost of the loan. Scammers may use fake company logos, false caller ID numbers, and other tricks to impersonate legitimate agencies and gain trust. Their goal is to obtain personally identifiable information (PII) or financial information, gain permission to access personal accounts or legal ownership of property, charge high interest rates and/or hidden fees, or charge fees for products or services that the victim will not actually receive.

There are several warning signs of loan scams that victims may experience, including a lack of interest in their credit history, pressure to act immediately, upfront fees disguised as application or document fees, promises of debt cancellation or settlement, and requests for payment through untraceable methods. Other red flags may include loan offers made over the phone, so-called government agencies claiming that you owe money, being encouraged to cut off contact with your creditors, and phishing scams.

To avoid loan scams, it is best to use trusted platforms like Credit Nigeria for loan searches. Credit Nigeria is an online platform that helps collate and compare personal loan options from reputable and legitimate lenders, saving time and energy while eliminating the worry prospective borrowers face from loan scams while applying for loans. Types of loan scams in Nigeria include the upfront fee scam, first contact scam, full guarantee scam, phishing scam, imposter scam, online lending scam, Ponzi scam, and debt relief scam.