Most individuals seeking to buy a home often borrow finance from banks or Non-Banking Financial Companies (NBFCs). By availing of such finance, individuals do not have to utilize their savings to buy their dream home. Purchasing a home through a loan is a financially sound decision as the amount has to be repaid over a period of time and does not involve making an outright payment.
There are many aspects to be taken into consideration while borrowing a housing loan. Opting for a well-reputed lender is imperative as the number of unscrupulous lenders is increasing by the day. Fraudulent lenders try to dupe unsuspecting borrowers by either extorting a huge sum of money or trying to obtain personal and financial information through unfair means. It is, therefore, necessary to have knowledge on how to avoid falling prey to such fraudulent schemes.
Following are four ways to avoid home loan frauds.
- Read the contract carefully
The representatives of financial institution explain the offered terms of the deal before you sign on the dotted line. Sometimes, unscrupulous lenders verbally offer attractive terms of the loan like lower interest rates, extended loan tenure, and low down payment. However, the terms of the loan may be different on paper. It is, therefore, necessary to read the offered terms carefully before finalizing the deal.
- Check the credentials of the lending company
If you are considering borrowing a loan from any financial institution, check its website to see if there is a registered address. You may also visit the branch located in your vicinity. Furthermore, you may call on the mentioned telephone number. You may also check reviews of individuals who have borrowed from the lender. It is advisable to select a well-known financial institution in order to avoid any difficulties in the long run.
- Avoid paying an upfront fee
Fraudulent companies look for individuals in dire need of funds and promise to provide a loan by asking them to pay an upfront fee. They then ask such individuals to transfer the amount into their account. This is one of the signs of a home loan fraud. Beware of lenders asking for an upfront fee as such scammers disappear after the amount has been transferred into their account.
- Refrain from providing your financial details
A fraud lender may try to obtain financial information through unfair means. Once you provide the necessary bank details, the fraudster withdraws a huge sum from your account, leaving you in a huge debt trap. Therefore, do not provide your financial details to any lender unless you are completely assured that you have chosen a genuine lender.
It is important to carefully evaluate various lenders and their loan offerings. Do not fall prey to any gimmicks. Instead, conduct extensive research before selecting a lender to avoid falling prey to any kind of fraudulent schemes.