Outlook Money
With the cost of education rising, the demand for loans has also risen. But this has also led to a rise in the number of cases of fraudsters targeting students desperate for education loans.
After securing admission, many students rely on education loans, but scammers exploit their urgency before deadlines, luring them with false promises of guaranteed loans, grants, or scholarships to extract money.
One common scam is where someone demands an upfront fee for disbursal of the loan. The loan provider may offer a relatively higher loan amount at a competitive interest rate. But the catch is that they would ask for an advance payment for the approval of the loan. Any such demand should be rejected outright.
Do not fall for any plan that promises guaranteed loan approval. Loans are always disbursed after a thorough credit history check that also includes a check of the borrower’s repayment capacity. Any genuine lender will not make any such claims.
Sometimes, one might get a call from a loan vendor saying that if you apply for their program, they will get rid of all your education loan debt in exchange for a nominal fee. Do not entertain such calls, as it is a clear sign of fraud.
In these cases, scammers lure students with offers of scholarships along with the loan, all for payment of a fee. They might also ask you to pay to get access to exclusive funds or awards, etc.
Scammers also target students who have secured loans and are enrolled in study. They usually pose as someone from the lending institution that has disbursed you the loan and claim that the bank is considering you as an eligible candidate for a new loan forgiveness program.
Always treat any of these offers with a hint of caution. It is important not to get overwhelmed by these offers and end up losing money.