Watch out for Lenders who ask for a Fee Upfront

If the pandemic has left you in financial difficulties and you are considering taking out a loan there is some  important information that you should know about advance fee loans. Upfront fees on loans are illegal - If you have bad credit and a loan broker offers to secure a loan for you for a $50 upfront fee, it is illegal for a company to do that according to the Canadian Anti-Fraud Centre.  

The Financial Consumer Agency of Canada has some tips about advance fee loans and some red flags to look out for.

• Don't pay upfront, legitimate lenders do not usually ask for advance fees.
• Don't fall for promises that you will get a loan regardless of your credit problems.  If you have a poor credit history then it is unlikely that you will secure a loan without paying large fees.
• Be careful about emails offering you a loan - they are usually scams.

If you have taken out a loan, paid fees upfront and believe that you might have been scammed you need to report it to your local police or contacting the Canadian Anti-Fraud Centre.

From an article by Consumer Protection BC