Advance fee loan scams – don’t fall prey to them

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Advance fee loan scams target the most vulnerable in our society.

By: Hitesh Khan/

With the rapid development of technology, our society is moving closer and closer to a paperless economy. This makes personal loans that much more important in our daily lives. Unfortunately, maintaining good credit can be difficult.

Worse yet, scam artists have found a way to reach out to those particularly vulnerable consumers, those with credit problems or no credit history at all, the unemployed, and even those consumers in emergencies who have an immediate need for cash.

Advance fee loan
Image credit: Pixabay

The scam – Advance Fee Loan – usually “guarantee” or represent a “high likelihood of success” that they can arrange a loan or credit for a consumer, regardless of the consumer’s credit history. The scam differs from legitimate credit offers in one important way – they require payments up-front, before the lender is identified and the application is completed.

Keep in mind, advance fee loan scams are oftentimes advertised in social media outlets – including Facebook and Instagram.

But no matter where it is advertised, it does not guarantee the legitimacy of the company or their offer. Consumers should not pay for a promise which in all probability will not be kept. Be mindful that it is illegal for companies doing business on the internet to promise you a loan and ask you to pay for it before they deliver it.

Expat personal loans – what happens when you have to leave the country?

The bottom line is, advance fee loan is illegal.

This means that consumers should ignore any offer that guarantees them personal loans for a fee paid in advance. Legitimate lenders never “guarantee” or say that you will receive personal loans before you apply, especially if you have a damaged credit history or no credit record at all.

Be mindful never to give your credit card, bank account numbers, passport numbers or NRIC numbers, whether it be asked for over the telephone, by e-mail, or any other means unless you are familiar with the company and know why the information is necessary. If you don’t have the offer in hand – or confirmed in writing – and you are asked to pay, don’t do it! Advance fee loan is fraud and it’s illegal.

If you need personal loans remember that credit scores are major considerations on your applications. The higher your score, the better your approval chances. A credit score is a number that the lenders consider before they determine if they should approve your application for loans in Singapore.

It is a joint effort between all the major lenders here, where data about consumers’ credit history is pooled together and aggregated. Within the aggregated data, lenders would have access to records that show the number of accounts that you have across different banks, and your payment history.

After crunching the available data, each account holder is then assigned a credit score. This indicates how good or bad of a risk you might be to the lender as a customer. The higher the number (up to 2,000 and AA rating), the better your credit score.

Although the the exact weightage of how your credit score is calculated isn’t public knowledge, the factors that the Credit Bureau of Singapore (CBS) uses in determining your credit score is.

Personal loan offers may seem like best friends in crisis, but watch out!

Factors like usage patterns of loan facility (e.g. if you have been making large purchases or transactions lately); your recent credit account activity (The number of credit facilities an account holder has is considered by banks as liabilities as they may perceive that you are over-extending yourself); and your account delinquency data, or how you have fared as a customer (this means where possible, always avoid making late or partial payments for your facilities).

Other factors considered by CBS include your credit account history, or how long you have been a customer (factors like if you have you been a loyal customer of your bank since you received your first credit card from them); how much available credit do you have (your credit score is affected by the number of accounts you have with various banks in Singapore); and enquiry activity of how many organisations have asked about you (having too many enquiries might indicate to banks that you could be taking on more debt than you should).

How to Secure Personal Loans Quickly

Every one needs an emergency source of funds at one point in time or another. And it may be challenging if you do not have extra cash stashed somewhere. So if you want best personal loans but not sure if you qualify – Don’t worry because iCompareLoan loan specialists can set you up on a path that can get you a loan in a quick and seamless manner.

We also can arrange the Best Home Loans in Singapore as our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs.

Whether you are looking for a new home loan or to refinance, our mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the loan. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.

For advice on a new home loan  or Personal Finance advice.

If you want to speak to our Panel of Property agents or loan specialists.

If you need refinancing advice, we are here