Become a Payday Loans Scam Spotting Ninja

payday loan scam

Payday loans can quickly get you out of a financial hole, but some of them put you in an even bigger one from the start. Unfortunately for all of us, payday loan scams are rampant at the moment, taking money from people who don't have much of it to begin with. Rather than getting beat down by one of these scams, you can take steps now to fight back against them in the future. Become a payday loans scam spotting ninja and you'll get the money you need without any hassle.

Here are some clear signs of a payday loan scam.

Give Money to Get Money

No real payday loan provider is going to ask for money before giving you money. That defeats the purpose of a loan. Similar scams exist for college scholarships or store coupons. If you're supposed to be receiving money of any kind, you shouldn't be putting forth money on your end. The exceptions lie in car loans or home loans where you may need a large down payment to lower your overall loan costs. Your payday loan company may ask for a bank account number or credit card number to act as "collateral" for the loan, just in case you don't make your monthly payments. They will never ask for a sum of money though.

Fraud Websites and Nonexistent Companies

Another easy way to spot a payday loan scam is to assess the website it comes from, assuming you're getting one online. Some sites scream scam from the start and others require a little more investigation. You could check with forums like and to see if a site you're looking at is already known to be a scam. You could also look at the Better Business Bureau's website to verify that a company is legitimate. That option works for both local and online lending options, so you can avoid scams all the way around.

Lending Options from Overseas

There are some legitimate payday loan companies in other parts of the world, but most of them will not reach out to people beyond their borders. If you live in the United States, make sure you stick with companies from the U.S. If you live in Great Britain, work with companies from there instead. This will help you avoid popular scams online, most of which come from African countries. If you see an opportunity from a company based in Nigeria, Ghana, or somewhere else along those lines, look for a different payday loan.

Rules in the Fine Print

You have to read through every document you sign before accepting a payday loan. Many scammers will blatantly tell you about the scam they run within this contract so they can legally get away with it. If you sign off on having them take extra money out of your account every month, you can't do anything once that happens. You also couldn't do anything if they sold your personal information to other lending companies. Break out the magnifying glass and thoroughly analyze your deal in detail. You'll be happy you did in the long run.

Too Good to Be True

At the end of the day, your ninja intuition skills are going to matter more than anything else. Does your loan sound logical, or is it too good to be true? Are you getting a fitting amount of money for your income and general needs, or are they offering more than you could ever afford? Is your interest rate really low, or is it on the high side? Most payday loans carry low values and high interest rates because the companies issuing them have a high risk of not getting their money back. A great offer may be tempting at first, but chances are it's not a reality. You'll end up with a fake check, a hefty contract, stolen identity, and much more.

Now that you have what it takes to be a payday loan scam spotting ninja, put your skills to the test. Look for a loan you know you can trust, and you'll be on your financial feet in no time.

Edwin Taivonen

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