Finance

Published on February 7th, 2019 | by Bibhuranjan

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How Safe Are Online Loans Today: 7 Tips To Follow

In the past decades, getting a personal loan from the bank and other financial institutions puts a person in a struggling situation. In this digital age, we see the emergence of different loans available online. Unlike in the old days where we are taking our feet inside the bank, online loans are just one click away. It is true that the internet and technology make the lives of people better. It speeds things up, makes them easier and gives us more convenience.

Compared to loans from credit unions and banks, it is easier to obtain an online loan. They may only offer few requirements and competitive rates that are incredibly tempting. Though it provides the borrowers with a good amount of advantages, it is highly important to be aware of the potential threats that can put you in risks.

Before grabbing your online personal loan, you must understand the process that can assure that the lender is legit and you will not end up as a hopeless victim. The internet is a huge marketplace for products and services and fraudulent institutions are lurking everywhere. It’s vital to determine if the lender follow the correct practices to avoid being scammed.

7 Tips for a Successful Online Loan

1. Check the Lender’s Physical Address and Contact Information

A reputable company has its information listed on the website. Take time to scan it if the place truly exists and if the written information is true. You can give them a call to personally talk with the lender and have a feeling if his/her business is legal. It is a critical step if you are unsure that the personal data you shared will be safe.

2. Make sure the Browser is Secure

Hackers and scammers steal personal information and use them for illegal transactions and other malicious activities. To check if the website is secured, it should be safeguarded by encryption software. This scrambles the information you entered in the website. At the loan site you are applying for, gently look at the status bar. A secured website has a “lock” icon and indicates “https” instead of “http”. If you see this, the site is safe and your data is in good hands.

3. Keep Your Information Personal

One common mistake of people is they misuse social media and have gone over the limitations of their private lives. You should not post your personal information, identification cards, full legal name, address, SS number, and phone number to social networking sites. Identity thieves might steal all of these and use them to access your account. Be careful of what you share to the public. If you have a printed copy of your loan application, you should keep in in a place where no one could sneak in. Also, if you throw them in the bin, make sure that you shred them and no other details are readable.

4. Create a Strong Password

Don’t be lazy of thinking a new password. Another common mistake people make is they use the same password from their social media accounts and use it as a log in details for the online loan application. This is risky. If you think you can forget the password, just write it down on your notebook or save it in somewhere else. When creating passwords, don’t make it easy to guess. It should be at least 8 characters long and has a combination of both uppercase and lowercase letters and numbers. Doing this will minimize identity threats and troubles.

5. No credit check required

If the lender does not care about your credit history, it is time to doubt. Normally, a reputable lender will check your credit report in order to determine if you are able to repay them. They will scan the reports if you have a good payment history and if you are trustworthy and diligent to pay your responsibilities.

In the opposite, scammers do not mind you doing the repayment and their scheme is to make you fall behind on the payments and charge you with ridiculously high penalties and late fees. A legitimate lender will get to see your credit score while a scammer is after your personal information.

6. The Offer Expires Soon

Fraudulent institutions will convince you to take urgent action. They will lure you to sign an agreement immediately because the offer is limited only and will expire soonest. As a result, without further thinking and evaluation, you will fall to the wrong decision. This kind of pressure tactic drives high-risk borrowers to get the loan instantly without knowing that they will be scammed.

If the lender is legitimate, they will let you decide and give you options to choose from. They will also offer a steady rate and reasonable rate based on your credit.

7. Requires Upfront Fees.

This scenario is one of the most common red flags in online loans. No reputable bank or financial institution will require you to pay upfront fees. This is simply a clear sign that the site is obviously dishonest and will take advantage of you. If a lender asks you to pay an upfront fee to process everything, you should be wary. You are not the one responsible to cover your initial payment or even the credit insurance.

Final Thoughts

Though applying for an online loan is more accessible and easier, it is essential to know the pros and cons of it. You may seek advice for a trusted Loan Advisor about this matter in order to come up with the best decision which will make you more comfortable. Do not take actions so quickly but take enough time to secure your information and the reputation of the lending company.

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About the Author

Bibhuranjan

Editorial Officer, technofaq.org I'm an avid tech journalist and enthusiast at heart. I like to mug up on new and exciting developments on science and tech and have a deep love for PC gaming. Other hobbies include writing blog posts, music and DIY projects.



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