You even make a few calls to the number provided and are convinced even further that only for a “small” upfront payment, you can enjoy a superior mortgage scheme with an easy repayment schedule. But no sooner than you have made the transfer of your funds, the person who had promised you the moon, does the disappearing act, and you are left high and dry with no home loan and a gaping hole in your pocket!
In a bid to “save” a few bucks, you realise that you have been taken for a ride in the name of an attractive home loan offer. So that you don’t step into such traps, here are some pointers that should serve as red flags for you, if you are in the pursuit of a home loan.
A unknown company with a flashy newspaper/ internet ad
A home loan or a mortgage is a fairly sophisticated product that authorized lenders are supposed to dole out. These lenders have a fool proof mechanism in place and will asses your credit worthiness by checking your CIBIL score and CIBIL report before it even approves your loan application. Even when your application is approved, many checks and balances are in place to ensure that there are no loopholes in the lending process.
Sure, there is a lot of paperwork involved and some upfront processing fee, but a lender of repute is clear about such things and makes the time and effort to explain you every such clause. Rest assured, this is for your protection. Therefore, if you come across an ad, that promises you scanty paperwork or speedy disbursal, it should serve as the first sign of caution, no matter how attractive the terms of the loan seem in the advertisement. Here are some obvious traps that you must stay away from.
A fee in advance
Any company who is asking and insiting for a fee in advance to approve your loan while prmising the moon, should set the alarm bells ringing in your mind about the same. An authorized lender can only ask for a loan processing fee after your loan application has been approved.
Unwilling to answer tough questions
If any company representative is unwilling to explain the terms of the so called “attractive loan” or squirms the moment you start asking tough questions, you should not waste a moment in guiding him to the door. Any lender worth his salt, should have nothing to hide or be uncomfortable about when a prospective customer asks for details. In fact, he or she should be willing to explain things to you as many times as you may want. If there is no sign of that happening, you obviously have a problem in hand.
Some salesman of such fraud companies are glib talkers, and may even use pressure tactics to get you to sign documents without giving you an adequate chance to go through the documents. Do not succumb to any such pressure, and insist on reading all the documents carefully. Chances are you will discover the fraudulent terms and conditions right away, when you start reading these documents!
Asking for a personal or financial information online
In this hyperconnected world, it does not take much time, money or effort to create an authentic looking webapage that is in a pursuit to extract sensitive financial or personal information. Any webpage that claims to be “approved” by the Government or a reputed lender and is asking you for any such information should serve as a red alert to you. No authorized lender or even the Government has the right to ask for any such information online that may cause you any monetary loss.
Such fraudulent loan companies target salaried individuals who are prone to accessing a lot of credit and do not have a great CIBIL score to boast of in the first place. That is the reason, that such people walk willingly into the trap of such fraudsters. Do remember, that in order to get a home loan, you should work towards having a satisfactory CIBIL score. If you have a good credit history and your CIBIL score is well above 750, there is no dearth of reputed lenders who will vye for your attention and be more than willing to give you a home loan.
The author is Co-Founder & Director, CreditVidya.