(Mar. 10, 2022) — Before the advent of the internet, people had only one way to borrow money. You go to a bank near you, the bank representative talks with you, you fill out the application form with your personal information, and you wait for the approval of your loan application.
Nowadays, loan applications are now very convenient thanks to the internet. You simply have to connect with an online lender and send your application online. It’s a lightning-fast and no-hassle transaction because there’s no need to go out of your house and visit a bank.
However, despite the simple and quick application process, many people are still wary of online loans. Is it really safe to get loans online? Let’s find out in this article.
Yes, Most Online Loans Are Safe
While there are predatory lenders online, there are many loan providers that follow state regulations and ethical lending practices. Many consumers can attest that online loans are safe. You just have to read testimonials and reviews of online lending companies on the internet to know that.
The high number of borrowers that get online loans is proof that they’re safe. But, this popularity doesn’t mean that you don’t take cautions of bogus online lenders. Go to sites like SavingAdvice for some tips on applying for online loans.
Why Should Money Borrowers Consider Online Loans?
There are several advantages to getting online loans. We all know that traditional lending companies and banks don’t easily approve high-risk borrowers. A borrower must have a high credit score to get a bank’s approval. In contrast, many online lenders offer bad credit loans to borrowers with low credit scores as long as they have a regular source of income.
Online lending companies also provide loans with lower rates and fees. This offering is quite common to online lenders because they have fewer overhead costs of their business. Applicants with good to excellent credit may also get fast approval and even lower interest rates.
A quick assessment of your loan application and approval is possible because the whole process is online. Loan applicants don’t have to hassle themselves by going to a loan officer and waiting for hours before they get notified about the status of their loan application. The convenient application process is one reason many borrowers now prefer online loans.
Nowadays, there are peer-to-peer networks composed of lending businesses or individual investors that are willing to lend money. The good thing about this is that there’s no financial institution that serves as a middleman. This feature greatly benefits borrowers as they can avail of favorable interest rates and loan terms.
Tips When Borrowing Money Online
Take note of the following tips to increase your chances of finding a legit online lender that you can trust.
Assess the Website of the Online Lender
It might sound superficial but you can tell that an online lender is legit by its website and content. It’s hard to trust an online lender’s website that doesn’t have a decent web design and is full of too-good-to-be-true copywriting.
Read Customer Reviews and Testimonials
If you want information about how an online lender does business, read reviews and testimonials by its former customers on the internet. For sure, you can search about the lending company online, or you can look at Better Business Bureau for what people say about the company.
See If the Lending Company is State Registered
Some states require online lending companies to register their businesses. It helps borrowers determine if the company is legit because it has state registration. When you’re applying for an online loan, you can ask the lender if their company is state registered, or you can request a registration number for that purpose.
Call the State Attorney General
You can also contact your state attorney general and ask if an online lending company is doing legitimate business. Give the name of the lending company, and the office of the attorney general will tell you whether that company is registered with pertinent government agencies.
Many borrowers will attest that online loans are safe. The benefits that online loans provide are some of the reasons why people prefer them over traditional loans. While online loans are generally safe, you still need to be wary of predatory online lenders.