Just a decade ago, online banking in Malaysia offered limited services, and many Malaysians would still prefer conducting their financial transactions at the nearest bank branch.
Taking some time off during a working day, waiting for hours at the bank, and travelling back and forth was such a hassle. Thanks to technology, we no longer have to waste a lot of time and energy to do things like depositing or transferring money, applying for loans and more.
While technology has improved our daily life, it has also become one of the most dangerous traps in the world. Identity theft and phishing are some of the most common threats when it comes to making online financial transactions.
For those interested to apply for a personal loan online, we have some simple and smart tips to stay safe while you conduct your business.
Here’s a checklist that you need to tick to stay safe when applying for a personal loan online:
1. The lender’s website is secure
An unsecured website is a dead giveaway. Your connection to the lender’s site is not secure, and any sensitive information that you enter, such as credit card number, personal info, or passwords, could easily be stolen by attackers.
What to do: As a rule, there should be a padlock symbol on every page where personal info is required. The site address should also be ‘https’ (the ‘s’ indicates that it’s secure).
For those on chrome, you can easily check whether the site is secured or not by looking at the security status, which you can see to the left of the web address.
Don’t continue with your transaction if you see the second status. If you see a red symbol, it means the website is dangerous and you should leave immediately.
2. The lender is legally registered
Mention the word ‘ah long’ and many Malaysians will immediately think of the colour red, be it paint or worse, blood. The red coloured paint is a popular tool used to threaten borrowers.
Not long ago the ah longs or loan sharks had an open season with their borrowers: those who failed to repay their loan would be dealt with in a scary manner. Many cases where borrowers are attacked (or those close to them) were reported in the media.
What to do: No matter how desperate you are for financial assistance, never deal with the violent ah longs or apply for a personal loan with illegal lenders, whether online or offline.
The lender must be legally registered, whether with the Companies Commission of Malaysia (SSM), the Central Bank of Malaysia (BNM), the Ministry of Housing and Local Government (KPKT, which is also responsible for moneylender and pawnbroker licensing), or any other related government institutions.
The fastest way to know if the lender is legit is to see the company registration or license number, which can be found at the bottom of the website. If not, you can also check the respective websites of the institutions mentioned to find out more about your lender.
3. The lender has a physical address
A legit business will have a physical address for professional reasons. Most loan scams would obviously stay hidden, hence the absence of an address. Or they might provide you with an address, only for it to turn out to be a vacant lot.
What to do: If you have the time, check or Google the money-lending company’s address and make a visit just to see whether they really exist. Verify them and you’ll be glad you did.
4. The lender is easy to contact
When things go wrong during an online personal loan application or you need to find out more info about the loan, you’d want to be able to contact customer support immediately, whether via phone or email.
What to do: Before you proceed with your application, find out as much as you can about the loan to see whether the lender has decent customer support. They should be available and must be easy to contact every time you need assistance.
If the lender doesn’t provide contact information, that’s an instant red flag.
5. The lender is very thorough with credit check
A credible lender will run a thorough check on your credit report and verify your information to abide by the rules and regulations of the government.
They will want to know whether you’ll be able to repay the loan, whether you’ve been consistent in paying your bills, and things like that.
What to do: Make sure the lender asks for the right documents required to process personal loans, for example, income statements, a copy of NRIC, EPF statement, or BE Form (with validated payment slip/receipt).
If the lender doesn’t care much about your credit report and ignores your payment history, it’s likely a scam.
6. There’s no ‘funny business’ with the lender
When something feels odd or if it’s too good to be true, trust your instinct. Watch out for these warning signs:
- You’re required to make a payment – You should never pay to get a personal loan. Don’t fall into this trap. There are probably scammers waiting to steal your debit or credit card info if you make an online application.
- The loan offer is questionable – If the lender is not transparent in their loan terms, that’s a red flag. Important details (e.g. the final cost plus interest) should be provided. Make sure you have the complete terms of the loan in hand before signing anything. Also, if you spot too many grammar or spelling errors, it could be a scam.
- The lender “guarantees” approval – Loans are never guaranteed, as approval depends on one’s creditworthiness. If you don’t meet the requirements, your loan will not be approved. Scammers, on the other hand, would “guarantee” an approval so they could charge you with upfront or processing fees.
- Bad reviews and ratings online – If you find too many bad reviews and ratings about the lender, that could be a sign of a scam.
And if you’re looking for a personal loan to address an urgent need like a home renovation or debt consolidation, we’re here to help. Check out some of the best personal loan options in Malaysia, and also some other ongoing personal loan promotions.
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