It is a toss up sometimes if our experiences are going to be pleasant or not. When borrowing money online, you must have some things in mind before you pick a lender.
A customer needs to be informed and ready to ask important questions regarding their transaction to safeguard themselves. There are a few quick and easy things you can do to ensure that your loan application goes smoothly and ensure that you are protected from fraud.
1. Is the Company Real or Just a Website?
Real companies will have a physical address listed on their website. This information should be easily found and not hard to locate at all. Be wary of post office box mailing addresses. Compare the address to a listing in the yellow pages online or call the phone number to make sure it is not fake.
2. Where Are They Located?
The company may have a real location but they may not be located in the United States. Making sure they are headquartered in the U.S. allows you to take advantage of federal and state lending laws and legal protections.
If you borrow money from a lender out of the U.S. you are doing so at your own risk as they are not held to the laws and restrictions in the United States.
3. Ensure the Site is Safe and Protected
To tell if the site you are on is a secure one before you begin the application process there are two things to look for.
A. There should be a yellow padlock icon at the bottom of your browser winder that indicates you are on a secure connection.
B. The web address should start with “https” and not just “http”. Some browsers actually give you a warning window for fraudulent websites.
4. Do They Adhere to the Truth in Lending Act?
Make sure that you are told what your interest rate and APR will be before finalizing the application. Rates should be based on your credit history so it therefore should not be the same for every person who borrows.
Payday loans don’t work this way, but you should be told what your interest rate and fees are. If you are not given the information quickly and easily, you should walk away and consider another lender.
5. Are Allotment Payments Available?
Making allotment payments keep you from losing or forgetting a bill when you move. It is illegal for a lender to make this a requirement and should not be considered into your loan decision. If they offer it, it can be an advantage to you.
6. Check the Better Business Bureau
If the site has a “BBB Reliability Program” icon on their website, click it and see if it takes you to the BBB website. This icon can easily be copied and pasted to any site. Or go to the site yourself and look them up individually. Check for complaints and resolutions before making your decision to use that lender.
7. Does the Lender Help You Determine if You Can Pay the Debt Back?
Any company that loans you money should be leery about giving you more debt than you can handle. Most companies will check your debt to income ratio to determine if you are getting in over your head. It is your responsibility to pay the loan back so make sure you are dealing with a lender that will help you stay afloat.
8. Satisfaction Guarantee
A company that offers great products and great customer service will offer a satisfaction guarantee. Online lenders shouldn’t be any different.
9. Your Privacy is Important
The privacy policy should be listed on the website and be easy to find. Look for this before you even start your application. Read it thoroughly to protect yourself and know what you are getting into. Find out how that company will use, share and protect your information before signing on the line.
10. Peer-to-peer Lending…BEWARE
There is something online that is called “peer-to-peer” borrowing, a person loans money at an agreed upon rate to someone else. These sites are trusting individuals that you don’t know, may not care much about your best interests and may not use your information in a legal way. They also are not held to federal lending laws so be very cautious with these sites.
11. Do They Offer Financial Education Resources?
Good lenders want their consumers to make smart financial decisions. By having resources on their site they are giving you that chance.
12. Your Credit Report is Yours to Protect
One of three companies should be used to check your credit (Experian, TransUnion or Equifax). Some lenders will only report negative items. Ask the company what their reporting policies are. If they do not do any credit reporting, beware.
These tips can safeguard your transaction and ensure an easy and painless loan. Be an educated consumer armed with knowledge. Good luck!