Don't fall for Internet loan scam out of desperation
Bankruptcy limits loan choices, but don't make a bad one
By Kevin Weeks | Published: June 27, 2015
Dear Credit Wise,
I just went through bankruptcy and need a personal loan. I found personal lender over the Internet that would lend me the money. Here's the information that he is requesting from me, and his notes, which I copied from the form he sent.
Full Name of Account Holder:
Name of Bank:
Bank Account Number:
Amount to be Transferred Into Your Account:
Western Union Transfer: If transfer of the loan must be a Western Union Transfer, except other was stated by the borrower which means, you will have to provide your Western Union Information's for the transfer of your loan funds which are this information:
Western Union Information's Receiver's Name:
Amount to be Transferred Into Your Western Union Account: For Notification, As I Stated, I will like you to get back to us with the Transfer Option you Intend to proceed with. You are to get back to me with the option in which you need this loan to be Transferred to you, Okay ...
How legitimate is this? -- Margo
While there are certainly legitimate institutions that do business via the Internet, this one screams "scam."
I see many warning signs in the information they are requesting from you. These signs start with the request for your banking information and end with what seems to be an ungrammatical but urgent message to act now.
Do not do it. Your bank account number and bank routing number alone give enough information to create counterfeit checks on your account. And that may be only the beginning. Western Union has a package of fraud awareness warnings on its website showing all the different ways its legitimate service can be bent to illegitimate ends. It begins with this warning: "Con artists use good people like you, and good money transfer companies like Western Union, to steal money." Don't be one of the victims.
I know that having a bankruptcy on your credit report makes it very difficult to qualify for a personal loan, so I understand why this might seem like an attractive option for you. You do not say why you need the loan, but that should be the first question you ask yourself. Are there other steps you can take to alleviate your current situation, such as working overtime at your work or even taking on another job? Are there expenses you can cut? Is there a way to delay payment for now?
The offer you're considering now drips with signs that it's a scam. If you can find a more legitimate offer, you still need to think twice and then think again. Whatever offer you take, be aware that having a recent bankruptcy on your credit report pretty much guarantees that you are not getting this money for less than a double-digit interest rate, and it could be as high as 50 to 60 percent. Again, be very careful.
This is very expensive money you are thinking of borrowing, so you need to be very sure that you understand that and are prepared to deal with the consequences. It is a sad fact that for many consumers the road that led them to bankruptcy is one they will travel over and over until they learn the underlying reasons for their financial problems. Explore all of your options before you move forward.
Be wise with your credit!
See related: Steps to regaining credit after bankruptcy
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
- If health problems strike, ask for hardship rate reduction – Avoid a settlement if you can; its credit score impact lingers ...
- Before you charge, have a plan to pay off your debt – Yes, you can buy now, pay later. But know the consequences ...
- Deciding whether to settle a credit card debt – Do you have a lump sum, and are you ready for a credit score hit? ...