It’s a crazy world out there that even if we prepare ourselves, we still get caught up in moments where our current finances are not enough. That’s why many resort to borrowing money. Others may have other reasons, such as financing a business or needs extra funds to purchase a property. Either way, people nowadays are taking out loans, and the number of borrowers is increasing exponentially every year.
But it’s not only the borrowers’ percentage that’s increasing. The supply of lenders is also increasing. It’s not surprising why there’s a lot of lenders flooding the market, especially online lenders. The increasing numbers of online lenders are helpful for many borrowers. However, they also pose a lot of risks.
Every borrower must be equipped with knowledge on how to spot-check a legitimate and trusted online lender. To do so, here are the five things every borrower should thoroughly check on their lender before taking out a loan.
Five Important Things To Check
The internet is a messy place- both the good and the bad are present. Anyone can start their online lending business easily and profit from it, either in an honest way or by scamming their clients. Of course, we don’t want the latter to happen to any of us.
This is why you must carefully research and study a particular online lender before you take out a loan. Here are a few things you can do to check their legitimacy.
1. Customers Loan Reviews
Just think of it like you are shopping for something online. You would want to know what the other customers who purchased the item think of it. You want to know their perspective and their experience with the product.
Was it good? Did the company provide a better customer experience? It’s no different when it comes to looking for the right online lender.
You would want to know how their previous customers think about them and their service. That’s why you need to check and read the customer review for a specific lender that you’re eyeing. The rating matters as well.
2. Customer Service
One thing that impresses any potential customer or borrower is the company’s customer service experience. If your chosen online lender renders excellent customer service, answers your questions with clear and detailed information and prompts, it means they prioritize their customers.
Customer service is vital, especially for borrowers who have a really bad credit score. They have more inquiries and concerns that need to be addressed and are more anxious about whether they are eligible for a loan or will be approved. An ace customer service proves that the online lending company puts their customer first and assists them diligently.
3. Experience
Experience has a lot to do in identifying a trusted online lender. The experience will show when the lender is presented with a problem from the borrowers’ side. Moreover, experienced online lenders will have a broad perspective when it comes to handling and answering questions.
Experienced online lenders also have established track records, which means they have already engaged with other institutions. Stories and reports are also published, mentioning that they are excellent and reliable lending companies.
4.Proof of Credibility
Checking a company’s proof of credibility can be done in various ways, such as checking the business’ physical location, calling their phone numbers, and checking their website address. You can also perform a meticulous business background check at the Better Business Bureau (BBB).
The business’ ratings, complaints, and other pertinent details about the company are available at BBB. You can also further check complaints at the U.S. Consumer Financial Protection Bureau (CFPB). The institution keeps a database of complaints about all financial products being offered by online lenders.
However, not all institutions are listed at BBB, so it’s better to read reviews and news about the lending company. You can also check recommendations at trusted finance blogs and financial expert websites as they promote trusted online lending companies.
5. Check the Federal Registration
Borrowers should be mindful of their state’s law concerning money lending. Any lender, and even loan brokers, have to register in the state they are operating in. The state will require every lender to register for a license. If the online lender you are eyeing for is missing any of these requirements, don’t continue or start any engagement with them.
Takeaway
The need for every individual to have extra money is increasing, and with this demand, online lenders are also growing. However, not all online lenders are legitimate. Fraudulent and scammers still exist, especially in a vast internet world. Many financial experts advise being very cautious in engaging with different online lenders. If you are not sure about an online lender, ask around for help. Your friends and relatives may have better suggestions, and they might recommend a better one.
