Safe Loan Practices
Can You Loan Me a Fee?
Have you ever received a solicitation by mail, telephone, or e-mail advertising that you are pre-approved for a loan or credit card? The soliciting company says you are pre-approved regardless of your credit history, but you have to pay an up-front fee in advance of receiving the credit card or the loan. All too often, these supposedly "pre-approved" credit cards are not legitimate. The fees that are paid up front are taken and the company that made the offer is never heard from again.
The Federal Trade Commission offers the following points for you to keep in mind before responding to ads that promise easy credit, regardless of your credit history:
- Legitimate lenders never "guarantee" or say that you are likely to get a loan or a credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy.
- Legitimate lenders never ask you to pay for processing your application.
- Never give your credit card account number, bank account information, or Social Security number over the telephone or Internet unless you are familiar with the company and know why the information is necessary.
- Make good use of the ever-present rule of thumb — if it sounds too good to be true, it probably is.