When you’re looking for payday loans, it means that you need cash to assist you in a financial crisis. However, if you got a payday loan from a shady lender, it could be detrimental. It could make your financial situation worse than it was before, with hidden fees and interest rates that are too high. Do you think you’ve found a scammer, profiteer, or a fake payday loan lender? Use these four tips as a guideline when trying to spot them.

  1. Their Rates Are Exorbitant 

Although lenders set their own rates, you should be wary of a lender that charges interest rates that are higher than the initial amount you loaned. Needless to say, if you were charged the same amount that you borrowed as the repayment, you’d effectively have been charged double what you didn’t have in the first place. This would send you into a seemingly bottomless pit of debt. 

If you come across a lender like this, you need to be aware of their end goal. Called profiteers, these lenders use your financial situation to their advantage of people’s circumstances to make as much money as possible. Before you take out a payday loan, make sure that you’re aware of the charges and interest rates. If the repayment charges are more than what you want to borrow, you should use a different lender. 

  1. Their Information Is Lacking 

Some of the more difficult scams to spot come from payday loans that you can apply for online. Online lending scams set up a website that requires that you fill in more private information than is necessary. The information you could be asked to provide could include your credit card number, bank account details, home addresses, date of birth or phone number. And, if their website contains little to no information about the lender, that’s your red flag. 

An official lender would have contact details, email addresses, and physical addresses on their site so that you could contact them should you need to. The risk with these lenders is dire. They could steal money and even steal your identity. 

If you come across a payday loan site that fits these parameters, you should first try to make contact before you provide any information. Talk to the lender using whatever contact information they’ve provided, and try to find their physical address on Google Maps. If you can’t get hold of them using their contact details, and if Google Maps can’t find their address, then you shouldn’t try to do business with them. They will most likely try to scam you out of money or use your private information against you. 

  1. They’re Not Registered 

All private lenders in New Zealand need to be registered and licensed to operate as a loan provider or a banking institution. If they follow the regulations that are stipulated by New Zealand’s government, they should be known as Registered Financial Service Providers, with a registration number. If they can’t provide even the most basic information on their registration or license, then they are operating illegally. They might just be doing it to earn money from the interest of payday loan repayments, but they could also try to use your personal data to steal your identity or your money.

  1. They Seem Too Good To Be True 

Although lenders will try to sell their services in any way possible to bring in more clients, you should be wary of specific terms that they use in advertising. Remember, loan lending facilities are businesses, and they need to make money to continue being a reputable facility that provides payday loans to people when they need them most. For that reason, they can’t give payday loans to just anyone, especially if they don’t fit their requirements. 

However, take note of the claims that they make. If they say that you’re guaranteed approval, or that you’ll be charged zero interest, beware. These promises sound too good to be true because if they did that, the lender wouldn’t make any money. If you acquire a loan from them and aren’t charged interest, for example, then they probably aren’t going for your money. In this case, their target could be your data. 

When applying for a payday loan, you are in a situation that can only be helped by using this service. Unfortunately, scammers and profiteers could use your case against you for their gain, leaving you in worse financial standing than before. If you’re looking to get a payday loan, make sure that you use these tips to determine whether your lender of choice is credible or not.