With so many scams around, it’s hard to know if a Loan company you’re dealing with is real or fake. No one wants to lose their money to scammers or become a victim of fraud. That’s why we’ve put together this guide. Here, we’ll help you check if the company you want to borrow from is legit.

1. Does The Loan Company Ask for a Credit Check?

Almost all legitimate lenders will carry out a Credit check before approving your loan application. If the loan company says they won’t be doing a credit check, then be wary. There’s no such thing as a free lunch. No legitimate loan company will give you a loan without doing any kind of checks on you first.

However, don’t confuse this with the search not appearing on your credit file. When a company tells you that applying won’t impact your credit score, it might mean that they’re carrying out a soft search. Some loan companies do this to see if you meet their lending criteria. Always read the small print on the lenders site to be sure. Some companies or lenders even do a hard credit check which can leave a mark on your credit file.

2. Do They Have an Address and Contact Details?

All companies have to operate from somewhere. They should have contact details that show how to contact them and where they are based. Start by looking at the contact page on their website. It’ll show how to get in touch with them.

If there’s no address on their website, look on Companies’ House. There you’ll find details of the directors, and their registered office address. Scammers won’t want you to find them, so they’ll avoid giving you any contact information if they can.

3. Are They Registered with the Financial Conduct Authority (FCA)?

Another good check is to see if they’re approved by the FCA. If they are, they’d be listed on the FCA register. This register shows details of firms, individuals and other businesses. Being on this list means that they are regulated by the FCA. If the loan company you’re about to apply with isn’t on there, it’s probably best to avoid them.

4. What Are the Loan’s Terms and Conditions?

When you apply for a loan, the terms and conditions of the loan should be clear for you to see. They should show you what’s in the contract. The information they would include is as follows:

• The amount you’re borrowing.
• The fees you’ll pay.
• Any potential penalty charges.
• Your interest rate and the total amount of interest you’ll pay.
• The total cost of your loan.

If a company asks you to make any payment up front, before your loan has been approved, avoid them. It’s likely to be a loan scam company. They’re probably trying to get a quick payment off you before you find them out.

5. Search for Information About the Company on Google

Enter the company name on Google or Bing and see what comes up for them. Check for all the reviews given on the companies’ online business listing. Look on independent review websites rather than just reading the ones that are on the company’s own business profile.

Reading other people’s experiences will give you an indication of how real the company is.

Have a look on their social media channels too. Look at what’s being posted and how long they’ve been posting for. All this will help give you a better idea of whether they’re scammers.

In conclusion

Taking out a loan, no matter the amount, is a serious thing. It’s important that you choose the right company to borrow from. Remember, if you’re in any doubt, don’t take the risk. There are lots of really good lenders around who are there to help you. If you need a short term loan, Lending Stream could be the right choice for you! We’re authorised and regulated by the FCA (see here) and can be found on companies house here.

Disclaimer: Please note, we are not providing financial advice. Our blogs are written for informational purposes only.