If an unexpected repair costs more than the cash you have on hand, you might need to take out a loan. An online loan can be a convenient way to get the cash you need in an emergency, thanks to the Internet. Unfortunately, you also have the Internet to blame for how challenging it can be to find a loan online.
With just a few keystrokes, you can find hundreds of options delivered to your screen by your favorite search engine. While some of these hits will be legit, others could be scams.
The potential for accidentally falling for a con has never been greater. You can reduce your chances of becoming a victim by following these easy tips.
Confirm License and Registration
When shopping around for lenders, the first things you should check for are license and state registration. This information is more important than qualifying criteria, loan amounts, or costs. That’s because these permits indicate that the financial institution is allowed to offer personal loans and lines of credit in your state. If they don’t have these accreditations, it won’t matter how much their loans cost because you shouldn’t borrow from them.
To earn such accreditation, a financial institution must follow state and federal lending laws. It’s important these organizations follow the law, as they’re there to protect you from scams.
You should find the license and registration on their website without too much searching. A financial institution such as MoneyKey shows its accreditation at the bottom of each loan and line of credit’s official page.
If you can’t find any license, there’s a good chance a lender doesn’t follow the rules set by your government. In other words, they may employ predatory or abusive lending tactics.
Compare Rates and Fees
Another good way to find legitimate online loans is by looking at the cost. Every financial institution applies fees or charges on loans, but what kind and how expensive they are could tip you off that you’re dealing with a scam.
Interest, origination fees, late fees, and even prepayment penalties are normal costs of doing business with legitimate lenders.
Some fees, however, you’ll never see tied to legitimate online loans. An advance payment fee, for example, is a red flag. It’s a fee you have to pay before a lender releases your funds. But if you’re borrowing money because you don’t have enough cash, paying a fee is counterintuitive—even impossible.
Review a Lender’s Security Policy
Legitimate online loans are protected by the latest cybersecurity, including sophisticated 256-bit encryption to protect your financial information.
Take the time to read up on their cybersecurity measures, as well as their privacy policy. This section of their website — usually found as a link at the bottom of the homepage — can tell you how they intend to collect, store, and share your information if you apply for a loan.
Finding Legitimate Online Loans is Easy if You Know How to Search
Dealing with an unexpected expense without enough money is hard enough. Don’t make it worse by falling for a scam.
Luckily, you can avoid scams and locking on legitimate online loans by taking care to research your options. Keep an eye out for accreditation, fees, and security policies. These three details can help you find a financial institution that offers responsible lending options.
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