A Guide To Choosing A Safe Lender
Getting a loan involves a lot of trust between both you and your chosen lender. Before you start looking into the application process, you should first make sure you're choosing lenders that are safe and trustworthy. That's right, it's possible to choose the wrong lender.
Here we have a short guide on choosing safe lenders, so you won't have to contend with predatory fees, lenders that don't treat their customers well, or even scams that pose themselves as loan providers to find victims.
Remember that you get the best lenders when you're the best borrower, meaning you always try your best to pay off your debts.
Know Your Options
First, you should know your options as a borrower. This means taking an honest look at your financial situation and figuring out which lender would be right for you.
You should start by taking a look at your own credit score. If you have a good credit score, you'll be able to get more favorable loans from lenders that have the highest standards, ensuring that they're trustworthy with your money and are held to high standards by their own clients. If you have a bad credit score, you'll need to get loans specifically made for people with bad credit or you run the risk of trying to lend from low-standard lenders that impose predatory fees and aren't as trustworthy.
Disreputable companies tend to use the desperation of those with bad credit scores to give them bad deals. By knowing your situation and what you deserve, you can find lenders who will treat you properly. Even with bad credit, you should be able to find a deal from a verified lender that doesn't throw in hidden fees.
Finding a good loan from trustworthy loan providers becomes easier when you're a reliable borrower.
Verify Your Options
Having mentioned verification, you should verify each lender that you consider. In the USA and many other countries across the world, loan providers are required to register with local and national authorities. It makes sense, given how much money they handle and how much influence they have over people's lives.
You can contact those authorities – the State Attorney General's offices in America – to find out if they're registered. Most of them will be and, if one isn't, then there's every chance that they're a scam or a rogue operation that isn't worth your time.
Lenders are often companies that need to advertise themselves and maintain a brand. This means that you can also use the Internet to verify the authenticity and trustworthiness of lenders. If a lender has a site complete with contact addresses and other relevant information, they're a company that exists.
A lender without any presence online can be a red flag as they can't be verified. They might just be bad at conducting business and marketing themselves, both of which should be grounds for dropping them and finding a new lender. You don't want them to just be safe, they should be good at what they do.
While you're looking up loan providers, you can also find forums or review websites where former borrowers can review the deals and business practices of the lender. Most of them will be positive to middling but, if there's an outcry of negative complaints from former customers, you should skip that lender. Popular lenders with a good reputation are typically best.
Avoid Unsolicited Lenders
Lenders are sitting on piles of cash and are waiting for a reason to give it away, so they won't come to you. A lender who contacts you without any solicitation is a red flag because they're desperate for your cash, so they may not be real or successful loan providers. Real lenders are popular and have options, you'll have to go to them to secure the deal.
Most of the time, unsolicited emails or phone calls trying to offer you loans are scams. They'll arrange a deposit payment of some kind, often masked as origination fees, and then they'll take the money and run. Some might try asking you for your login credentials for your bank account, something that no legitimate lender will ask of you. If a “lender” is asking for your PIN, they aren't a lender and you should probably report them to relevant authorities for investigation.
As we mentioned earlier, many of these operations target those with bad credit and will try to sway you by offering themselves as a convenient, too-good-to-be-true alternative.
Note that fees may apply for legitimate lenders but they'll subtract them from your asked amount, they won't ask you to send them any of the money in your account until you start paying the loan back. They won't smuggle any other fees into the deal after it has been agreed upon, either.