- June 5, 2021
How to Avoid Becoming a Target of Student Loan Scams?
Students often fail to meet their financial ends such as managing university fees, money for college accessories, rent, food, etc. Therefore, they end up finding solutions that seem too good to be true.
Unfortunately, students studying in the UK often fall into a scam through these practices. It leads to an unmanageable debt cycle. Also, scammers often drain students of their entire savings. Therefore, students require finding new and safer ways to manage their loss.
Universities and colleges in the UK inform students that student loan companies would never ask for bank detail update or confirmation. They would also not ask for account detail verification, offer a secondary secret question, or update personal details like email addresses.
The student loan company would also not ask for personal details like passwords or dates of birth. Moreover, it will only ask the answer to the secret question set by the student. Besides these basic guidelines, students can avoid student loan scams in many different ways.
7 Ways to Avoid a Student Loan Scam
● Don’t Make Upfront Payments
College or university students can avoid becoming a victim of an advance-fee scam by avoiding pay upfront. Instead, such scammers offer a large sum in exchange for processing or transaction fee. Unfortunately, students often get lured easily into this scheme because the scammer claims the fee is refundable.
Most of the time, the scammer poses as a representative of a reputable company. Therefore, students become vulnerable towards making an initial payment after checking it on the web. Representatives of companies engaging in such practices are doing illegal work.
A scammer may even offer a student debt relief in exchange for fees over a call. So, inform the company of all the details and don’t mention that the person offered benefits for free services.
If you have not heard the company’s name, it is best to stay away or do research before taking any further steps. Make sure that the guidelines mentioned by the caller are similar to the terms and conditions mentioned on the company website.
● Abstain from Immediate Loan Offers
Scam companies and individuals often tend to offer immediate or same-day fund transfers with a guarantee. Meanwhile, genuine organizations take time for processing loans as lenders check borrower’s details and verify credibility.
Besides this, student loan companies receive numerous applications every day. Therefore, making a promise of immediate loan deployment is not possible. Moreover, such companies remain under tremendous backlog because of the rising number of applications.
The scammers might even inquire about a bank account or other details to make the transfer. Therefore, students should stay away from such scams and seek help through government aids. Moreover, genuine companies can respond to a request for instant loans for students unemployed.
Such a loan can prove useful during graduation but would require financial documentation. However, these can help to manage everyday expenditures and make manageable repayments. Unemployed students can also seek other similar options.
● Refrain from Loan Consolidation Fee
Loan consolidation is an easy method used by students and graduates to combine several debts into a single repayment. Although it increases the total repayment amount, it helps to keep track of loans and manage finances.
Students often tend to use debt consolidation loans for the advantages it offers. Unfortunately, scammers and fraudulent firms offer this loan in exchange for a consolidation fee. They often refer to it as administrative and processing costs.
As such, there is no charge for consolidating loans for federal loan students. Therefore, imposters often target students that have private loans. The best way to avoid becoming a victim of this scam is by inquiring about the company.
Optionally, you can even consolidate the loan at no cost through the federal government. Also, make sure to search for similar companies. Finally, ensure to send a detailed note about the conversation to the student loan company owner and the government.
● Shun Offers for Clearing Student Loan Debts
Graduating students often receive emails or call for clearing entire debt from fraudulent companies. The UK government has a detailed description for writing off or canceling student loans based on the year of taking, years passed away, and bracket of loan.
For example, the government cancels or writes off Plan 2 after 30 years since the first due April repayment. The criteria for postgraduates differ from graduates based on states. The Student Loan Company (SLC) may even cancel the student loan in case of death.
SLC might even offer loan cancellation due to disability or illness that is not allowing to work. In both cases, it would require evidence and a Customer Reference Number. Besides these options, fraudulent companies offering debt relief should get red-flagged.
According to a source, private student loan forgiveness companies are extremely rare. Therefore, any private company offering immediate loan forgiveness is running a scam. Make sure to shun such organizations and keep known people informed.
● Don’t Declare Personal Information
Fraudulent companies may ask for personal details like date of birth, email address, or login information. Under any circumstance, don’t declare personal information to anyone. By acquiring personal details, scammers or fraudulent organizations get access to your account.
At times, you might receive emails or call from a debt relief company to sign a power of attorney. It provides the business to communicate with the loan service provider on behalf of you. You don’t have any obligation to sign such documents.
Moreover, sign a power of attorney or similar document may lead to losing a student loan account. Therefore, look out for companies that don’t standby promises without offering paperwork or make irreversible offers.
Even when you apply for installment loans for bad credit from direct lenders only in the UK, a genuine organization may ask for paperwork. They might check your credit history before offering a loan. They might check for defaults or complaints registered by previous lenders.
So, make sure to clear your dues and resolve unwanted remarks from the credit history by contacting the lender or firm.
● Bypass Stress Deals
Sales representatives often make calls to students on behalf of debt relief companies. They receive a tremendous commission based on signups. So, they often engage in a sense of urgency.
Meanwhile, a student unaware of this fact may become tempted with quotes like “loan offer ending soon, apply now.” At this point, students should understand that most loans offer to extend for a long duration.
Moreover, students should avoid becoming tempted with last-minute offers and research the organization before sharing details. By doing so, they can learn about the legitimacy of the offer and the company.
Besides this, they would have a similar offer on the official website of the organization. If there is such an offer, it will also mention an end date. If there isn’t, the company might remove it based on the standard minimum and maximum tenures.
A genuine organization would not stress you into a deal. The representative would also mention their affiliation with the Department of Education of the government. Additionally, the salesperson would even inform you that you can apply for the loan online or offline without paying fees.
● Stay Away from Companies Claiming Government Affiliations
Students should understand that fraudulent companies also offer private student loan services. In addition, they misrepresent their relationship with the Department of Education. However, they deceive you by acting as student loan relief companies.
Besides this, the government’s department doesn’t partner with any outside organization for managing federal student loans. So a quick method of identifying fraudsters is by check the “.gov” URL if it government-affiliated.
Besides this, also check for grammar mistakes on the website and emails. Hackers use it for phishing details from students. The website should also mention contacts. Check the UK government website to identify whether the organization is listed and the number matches.
Also, use the details mentioned on the government website to inform the company of fraudulent activities if the number doesn’t match. By checking lender legitimacy on the government website, you would remain stress-free.
Furthermore, check out easy loans to meet your debt requirement and make arrangements with the lender for easy repayments. Compare different lenders on legitimate websites mentioned by the government to avoid becoming a scam victim.
If you become a victim, change your login info, contact the lender, check your bank statement regularly, and file a complaint.