With the increase in peer lending every year, you can bet that scammers are looking for unsuspecting borrowers and small business owners to take advantage of them in clever peer lending scams and high-interest loans.
While not all peer lending scams will be easy to spot, there are some things that should alert you to a peer lending rip-off. 1. Legitimate peer lending platforms do not ask for an up-front payment. This should be fairly obvious.
2. Do not use money wire services like Western Union for your loan. Loans should go through your bank account through direct deposit or wire.
3. Peer lending scam artists will sometimes guarantee you a loan or quote a rate before checking your credit or application. No legitimate business would do this.
Most business owners would not think about going to a payday loan company for a one-week personal loan with annualized interest rates as high as 500 percent.
The problem is that most peer lending business loans require several years in business and current sales. If you don’t qualify, it could force you into shorter-term loans at high interest rates.