Getting a Loan Online: How to Avoid Scams in South Africa
Applying for a loan online can be quick, easy and convenient. However, it can also be fraught with danger. Thousands of South Africans are fleeced by bogus loan providers each year.
Online criminals are becoming increasingly sophisticated. However, the truth is that in most cases involving online loan scams, certain warning signs are present.
The best way to protect yourself is to know what these are and be alert.
Recognise the red flags of bogus lenders
The first step is to be aware of the tell-tale signs of dodgy loan providers. Here are some of the more overt indications that you’re dealing with a potential predator.
Bona fide lenders and financial services companies in South Africa are registered with the National Credit Regulator (NCR). Legitimate businesses will always highlight that fact on their websites and letter heads.
If your prospective lender is not accredited by the NCR, or the registration number does not match the number displayed on the official NCR website, look for another loan provider.
Rock bottom interest rates
Avoid companies that offer ridiculously low interest rates on loans. It’s usually a sure sign they’re running some sort of scam. Registered lenders charge rates that fall within NCR guidelines.
Unsolicited emails or texts
Beware of personal loan providers that spam your email account, send dozens of text messages or bombard you with unsolicited phone calls.
Rather select a registered lender based on a personal recommendation or referral.
Loan locator or finder services
Do not use so-called ‘Loan Locator’ or ‘Loan Finder’ services online. Their modus operandi is to send those who inquire what looks like a loan application form but is actually an annual service agreement.
Once they have your personal and banking details, they set up a debit order on your account to extract an initiation fee and monthly finder’s fees.
Any lender that demands upfront legal fees, transfer fees or clearance fees is a con-artist. Personal loan providers are allowed to charge an initiation fee but only as part of the loan agreement.
Poor business image
Finance companies that have cheap looking websites, full of spelling errors, inactive links and no contact details are more often than not bogus operators.
Similarly, lenders that are only contactable via mobile phone numbers are best given a wide berth.
Why consider Pawn My Car as your personal loan provider
Now that you know how to avoid being scammed, the next step is to find a reputable lender that has your best interests at heart. On that score, we can recommend Pawn My Car, and here’s why:
- NCR compliant interest rates
- quick loan application process
- no upfront fees or hidden penalties
- no bearing on your credit score
- a trusted South African company with physical branches in Cape Town, Port Elizabeth, Durban and Johannesburg
- a division of lamna Financial Services, a registered credit provider (registration number NCRCP7428).
With Pawn My Car, you can use a car, bakkie, truck or boat that’s in your name to secure a loan quickly and easily, with no delays or laborious paperwork. For more information, contact us on 086 172 9648 or simply complete and submit our online application form.