5 Things To Consider When Applying For an Online Loan
As a result of technological advancement, loans can easily be obtained. There are so many lenders on the internet who offer loans. The loan amounts and rates lenders make accessible to borrowers varies from one lender to the other. Lenders also have loan criteria they follow and they will only approve a loan application if the borrower fits into the criteria. Although loan acquisition has been made simple and straightforward due to technology, you might fall into the hands of fraudsters or scammers. Due to this risk, an applicant must conduct a background research on the lender before filling the online application form.
Below are some factors an applicant should take note of before applying for an online loan.
1. Secured Website:
When you log on to a lender’s website, check the left of your address bar for a little padlock. This padlock confirms that the site is secured. Most lenders encrypt the information you provide online with a 256-bit or 128-bit SSL. If the lender’s site is not secured with the above information, do not apply for the loan. It isn’t worth risking your private information over the offer.
2. Online Ratings and Reviews:
It is important to take note of comments made by people about your proposed lender. These information’s can easily be obtained online. In your research, you can ask if the reviews are positive or negative, problems reported by customers, and information about the lender just to ensure it is not a scam.
3. No Upfront Fees and Hidden Charges:
Legit lenders do not charge any fee until you receive your loan. However, before the loan amount hits your account, some lenders might deduct origination fee from the loan. It is advisable to conduct an online search for lenders, make your comparisons and choose the most reliable lender. You can then proceed to fill the application on their website, making sure you read and understand the entire form. When you see any red flag that can harm you, do not go on with the application. Some online loan providers charge hidden fees without informing the applicant ahead of time so make sure your application is not partly viewable.
If it is, quickly report it to the lending firm in time and make it clear that if you decide to quit the process, your information should be deleted. If you are unable to access the full application, do not apply because you will be required to fill the entire accessible or visible part before you can access the next part of the application of which may include some hidden charges you might not take note of or see. Check again and be sure that the fees or charges that will be applied doesn’t change in the entire application. It is compulsory for online lenders to be totally transparent about their fees and a legit lender will not withhold such information from borrowers.
4. Interest Rate:
The interest rates on online loans vary from lender to lender. They are not fixed but have an Annual percentage rate (APR) range and this largely depends on the type of loan you are applying for. Generally, the interest rate on online loans are very high. To limit interest charges on loans, usury laws have been set in most states. Lenders are to charge 35% or less but this law is not applicable to all types of loans. Payday loans for example falls outside this low and for that reason, lenders charge high interests on their loans. Tough individual states are governed by loan regulations, few states outlaw the regulations.
To be sure you can reimburse the loan, check the interest rate and conduct a self-assessment to see if you can pay back on time. Also to be on the safer side, determine the fee or amount you will be charged in case you are unable to pay back the loan on time owing to circumstances beyond your control.
5. Fraud:
The level at which a borrower’s information can be secured by online lenders varies from lender to lender. Legit lenders often run identity checks to validate the information borrowers provide. The advantage involved is that, this meticulous identity check rules out the probability that fraud or identity theft will occur. In recent times, online loans have become a very popular, easy, fast and convenient way of getting a loan but it has paved the way for scammers to also operate. Some online loan providers are frauds and scammers. They are able to use your identity through the personal information you provide to them to steal money from your account and make other transactions in your name.
To ensure you are not scammed, you can get in touch with the Department of Financial Services (DFS) to confirm the validity of the lender’s license. Legit lenders ensure transparency in their transaction by providing their applicants with vital information on the fees and interest on your loan amount, final cost of your loan, penalties, and repayment options on your loan. Avoid endorsing an incomplete document or contract.
Online loans are easy and quick ways of borrowing money in times of need. But it is important to know your loan limit as it will guide you to take the best loan to cover your needs. It will also help you to take the right amount you need and make a good plan for repayment of the loan. When taking online loans, always opt for good and legit online loan firms or providers to avoid any scams or fraud. Also consider the APR on the loan and any other fee or charges before applying.
Furthermore, make sure you can pay back the loan at the stated time before you fill the forms. Always ensure you are secured before taking an online loan so you can fully enjoy the benefits of obtaining the loan. Do not be in a haste to fill the application form. Read and understand the loan terms and feel free to contact the lender through the numbers or emails they provide on their website if there is anything you don’t understand. They will assist you and help you make the right choice for your loan.