With online borrowing, the convenience of getting a loan from the comfort of your home is a blessing. However, despite their many benefits, online loans are sometimes more unsafe than traditional loans.
With the rise in financial scams and predatory lending practices comes the risk of innocent borrowers falling prey to unethical lenders. That’s why it is incredibly essential to do the extra research and only ever commit to safe loans online.
However, even with this in mind, many borrowers fail to spot predatory lenders, despite thorough research. To help you make the right decision, we bring you 5 vital tips that can help you find safe online loans and spot unethical lenders with ease.
Let’s get started.
Conduct Thorough Research
When it comes to looking for safe loans online, the first step is to create a list of lenders and thoroughly research their websites. You also need to make sure you are researching their online presence, reviews and the experiences of other borrowers.
A legitimate lender will have a complete and professional website with all essential details including their office address, contact information and registration details.
It is extremely important to ensure that the lender is regulated and authorised by the Financial Conduct Authority (FCA). This is one of the most crucial indicators of a lender's credibility. A brief research will also help spot any miscellaneous red flags such as unresolved complaints or pending legal disputes.
Understanding Interest Rates and Fees
The next step after assessing the credibility of your prospective lenders is to understand their interest rates and fee structure. In many cases, you may find that the lenders are credible but charge an interest rate that seems unreasonable.
Moreover, certain online lenders also charge fees for various types of procedures like application fees, late payment fees, early payment fees and so on. It is advisable that you thoroughly go through your lender’s fee structure to ensure you won’t be charged unfairly.
On comparing a few lenders, you should be able to find one or a few that offer reasonable interest rates, a logical fee structure and transparent terms. Once you’ve found a lender who helps you clearly understand what you are expected to pay in total and it is written down on paper, that’s when you can go ahead.
Securing Your Personal Information
While assessing your lender’s credibility and payment structure is crucial, one of the major risks of online borrowing remains the threat to sensitive personal data.
When looking for safe loans online, make sure that the lender’s website is secure. A reliable indicator is the term “https://” in the URL along with a padlock symbol in the address bar, representing a secure connection.
You also need to make sure that you are connected to a private and secure network to prevent hackers from accessing your personal information. When applying for an online loan, try to do so from your home or a private place, instead of a public place, using public WiFi. Beware of lenders requesting unnecessary personal information, passwords or upfront fees as these can be signs of fraudulent practices.
Reading the Fine Print
Once you have found a legitimate online lender, it’s time to apply for a loan and wait for approval. When it comes to safe online loans, the approval process usually takes a day or two.
After approval, you will receive your loan agreement. This is another step where you need to be careful before going ahead with the loan. Make sure you thoroughly read your loan agreement before signing.
Although it may sound tedious, this is an absolutely crucial practice that can prevent you from severe financial damage and possible legal damages. It also clearly states your repayment schedule, payment flexibility or any early or late payment fees.
Being aware of these details will not only protect you from falling prey to unfair lending practices but also help you manage your loan better.
Choose Salad Money For Safe and Affordable Personal Loans
As we’ve seen, despite the existence of unethical and predatory lenders on the internet, finding safe loans online can be easy by making a few informed decisions.
With our simple tips, you can not only navigate through a sea of online lenders but also find safe online loans that are suitable for your needs.
However, if you are struggling to get loans from traditional lenders because of a less-than-perfect credit score, we’ve got you covered. As one of the largest CDFI consumer lenders in the UK, we specialise in offering safe online loans that are designed for employees with low credit scores.
At Salad Money, we believe that sometimes the traditional credit score system can be an unfair way to assess your loan affordability. That’s why with our open banking-based affordability assessment, we ensure that you get the loan you deserve.
Applying for one of our new loans doesn’t impact your credit score. We use Open Banking in our initial assessment. If successful, we report your loan to the CRA’s (Credit Reference Agencies). Your credit score won’t hold you back from being eligible.
To apply for a loan now, click here and for more articles like this one, visit our blog page!
