If you are planning to get a loan of any kind, it is important that you select the right lender to borrow from. These days there are lots of legitimate and trustworthy online-based private lenders, but not all of them are completely reputable. It is important that you take the time to look for a lender that will be able to match your needs and not rip you off in any way. The more effort you put into finding one of these lenders, the better off you will be.
The Threat of Fake Lenders
The first thing you need to take into consideration is that there are fake lenders out there, but there are ways to protect yourself from them. Even those who choose a legitimate lender can end up paying far more than they need to. This is why it’s so crucial that you make a point of getting all of this information before you start looking into your options.
Avoid Unsolicited Correspondence
You always want to avoid unsolicited correspondence, because it is not how legitimate lenders behave. Whether it is an email or phone call that comes out of the blue, it’s never a good idea to respond. These correspondences are usually just people who are trying to scam you. The best possible thing you can do is to not respond at all.
Common Red Flags
There are going to be certain signs to watch out for that may indicate a certain lender is less than reputable, including:
- Asking for money upfront: No reputable lender will ever ask you to pay fees upfront. All fees are always to be paid at the end of the loan’s term with the principle plus interest. This is a very common scam that you will want to avoid.
- Wire transfer requests: If you are ever applying for a loan and the lender requests that you wire them money for any reason, you need to move on. You should never send a lender any money until the loan period is over. Sometimes scammers will try to get people to wire them money in “fees” without actually giving a loan out at all.
- Suspicious name: If a certain lending company has a name that just sounds like it is trying to be official, it’s probably not for real. Once you have seen one of these names, it’s much easier to recognize.
When to Think Twice
There are certain situations where you should think twice about getting a certain loan. If a loan seems very expensive, you should take the time to shop around with different lenders. If you think for even a moment that you cannot afford the loan, there is a good chance that you can’t.
You should never borrow any sum of money from an unlicensed lender. It is important that you always look at the lender’s credentials, because otherwise you don’t know if they are truly legitimate.
Website Privacy and Security
You should also make a point of checking to see whether or not the loan site you are on is secure. If you see “https” before the site’s URL at the top of your web browser, you know that it’s safe to use. The last thing you want is to use a website that won’t protect the sensitive personal and financial details that you submit. Take a look at the privacy policy of the website as well. You want to make sure that the owner of the site has a policy of not selling the information of their applicants to third parties. This is a good way to get your identity stolen, so it is a necessary step when applying for loans online.
Approval
You might encounter some lenders that tell you approval is guaranteed for all applicants, but no legitimate lender can promise this. The truth is that either it’s a scam or they run a credit check like every other lender. You may still be able to get a loan even with bad credit, but approval is never a sure thing.
Never Accept an Offer Before Shopping Around
One of the first things you should do if you want to borrow money online is take a close look at your lender options. Not all lenders charge the same rates, which is why it’s a good idea to do this. Even if you get approved from a certain lender, you need to carefully look over the contract before signing. An electronic signature (typing out your name) is still legally binding, so keep this in mind.
If you want to borrow money for any reason, you should be aware of the dangers that come with doing so online. The internet can be an incredible resource for this purpose, but you have to know how to keep yourself safe.
