Beware of rogue loan providers

Would you like to borrow money? Then make sure that you do not have to deal with a rogue loan provider.

It is increasingly common for loan providers to provide loans illegally. It is therefore very important to always be alert to what is offered to you. First and foremost, it is important to check whether the financial service provider has an AFM license issued by the Netherlands Authority for the Financial Markets (AFM). The Financial Supervision Act (Wft) requires service providers to have such a license.

Check on AFM license

In September 2011, Loan & Money Borrowing stated that an investigation was being conducted into rogue lenders . The investigation was carried out by the Fiscal Intelligence and Investigation Service (FIOD) into loans offered at usurious interest rates. They mainly catered to people who could no longer borrow money because of a registration with the Credit Registration Office (BKR). These illegal providers often make use of the fact that these people are diligently looking for providers for a loan. Loans with attractive conditions and interest rates are then very tempting to the consumer.

However, do not fall for this and check the provider for an AFM license. In the AFM register you will find exactly which AFM licenses financial service providers have. By checking this, you can be sure that you are not doing business with an advocate of illegal money borrowing. Also be aware of vague phone calls or emails that require an insurance premium on the loan to be paid in advance. The patient lender is nowhere to be found after receiving the premium, without ever lending a cent.

Loan conditions

It is not only the check of an AFM license that is important when you take out a loan. It is also important to check the conditions of a loan such as the interest, repayment, costs and term. In addition, you must ensure that the personal situation is in order and that you can bear the monthly costs of the loan. Therefore, make sure that you choose a sensible term and borrow money responsibly.

The granting of loans by serious providers is very difficult as a result of malicious practices. That is why more and more loan providers present their products in other forms. However, this ensures that consumers can no longer see the forest for the trees. Therefore, make sure that you are carefully informed in advance before taking out a loan. A small interest saving can significantly reduce the total costs of the loan.

Do you still have doubts? Then also read The 10 golden loan rules and make sure that you borrow consciously or not at all.