How would you know whether the lender or loan provider is legitimate and registered with the National Credit Regulator (NCR)?
Today I want to show you the exact and simple steps to take to verify a credit provider in South Africa.
There are lots of loan scammers with different tactics to grab your attention in giving them your details and money. But at the end of the day, all lenders of money must be registered with the NCR in South Africa.
Let’s get started.
Verify Registered Credit Providers
To verify a legitimate loan provider, please visit www.ncr.org.za and search for the lender’s name or registered number.
NCR offers a public database of registered (over 8000) and canceled credit providers (over 2000) in South Africa.
Institutions that are actively offering loans and any type of credit will be listed in this database for you to find.
Review the lender’s details and confirm their registration status.
Common Types of Loan Scams
Here’s a list of the most common types of loans scams in South Africa and how you can quickly identify them.
No Credit Checks
Any lender that’s not interested in your credit history is a loan scammer.
According to the credit regulations in the country, lenders must practice their business responsibly and shouldn’t offer any client a loan they cannot afford to pay back.
So if a lender isn’t interested in your credit profile, how are they going to assess your loan application and offer you the right loan?
Following that, they’ll begin asking you for upfront fees.
Upfront Fees
Quick question, how are you supposed to afford an upfront fee when you’re borrowing money?
Legitimate lenders process loan fees properly and transparency in such, they’ll explain everything to you before signing any agreement.
And mostly, they’ll include the loan initiation fee in your total loan amount so that you can pay it back with installments.
No upfront fee to supposedly secure the loan.
Guaranteed Approvals
As indicated earlier, your payment history and credit score determine the approval of any personal loan application.
If the lender promise you guaranteed approval, you must it’s too good to be true.
Your application will go through necessary credit checks and affordability assessment, as obligated to do so by the NCR.
No lender shall over-indebt customers. They work closely with credit bureaus to get your credit report and understand the type of a borrower you are.
So there are no such guaranteed loan approvals – it’s a perfect sign of a loan scam in South Africa.
Reviews
In your process of identifying a legitimate credit provider, you must always look for company reviews online.
Use social media or Hello Peter for legitimate reviews about the company and make your decision there.
Loan reviews will help you understand how the lender works and treat customers. If the ratings are bad, then play far from that lender because you’re likely to run into the same issues.
Guaranteed approval
No legitimate lender can guarantee that you will be approved for a personal loan. If a lender claims that they can guarantee approval, it is likely a scam
High-pressure tactics
Scammers may try to pressure you into taking out a loan by creating a sense of urgency. They may claim that the offer is only available for a limited time or that there are other people interested in the loan. Legitimate lenders will not pressure you into taking out a loan.
Poor website or contact information
Scammers often have poorly designed websites and may not provide a physical address or phone number that you can use to contact them. If the website or contact information seems suspicious, it is best to avoid the lender.