Interest in personal loans is rising this year, industry experts say.
Unfortunately, potential scams are rising too.
Amid record-breaking unemployment rates and a staggering economy, consumers are seeking personal loans for two primary purposes: to consolidate credit card debt or simply to get by, says Brian Walsh, CFP and senior manager of financial planning at SoFi, a national personal finance and lending company.
“This is a way to help get them through until they get back to normal,” says Walsh.
Scammers have taken notice. In the first four months of 2020, the Federal Trade Commission (FTC) reported more than 18,000 accounts and more than $13.4 million in losses to COVID-related fraud. Those complaints cover a range of financial scams. But personal loan scams have been a problem since before COVID. Last year, the Insurance Information Institute, a trade group, recorded nearly 44,000 reports about potential personal and business loan scams.
“Unscrupulous people will try to take advantage of people’s needs,” Walsh says. And in the middle of a pandemic that’s putting the economy through the ringer, those unsavory people are finding ample opportunity.
If you’ve determined that a personal loan makes sense for…
