There are many lenders out there. Not all of them are legitimately in business. Therefore, you should be careful not to fall prey to these unscrupulous businesses. It is true that lenders can be individuals, organizations, state-owned companies, or banks. Whichever loan you are applying for, you need to ensure your security, as well as that of your family, is guaranteed. Moneylenders are even more popular online. While you may borrow money online, you need to be careful with such options. Below are some indicators that the lender you are in business with is running a genuinely registered enterprise.
Ability to contact it online or offline
Due to increasing company presence online, it should not be difficult to obtain information regarding the company details. In the event you want to initiate an inquiry, the company staff or the customer care should be courteous enough to direct you on the information you need. Your lender should also disclose the company’s license details and a precise physical location of the firm so that you can give them a visit just to ascertain the authenticity of the company.
Security of the website
Locate the small padlock at the top left corner of your URL bar to check the safety of the site. legitimate lenders have their website privacy information encrypted with the latest SSL security protocol to ensure that the information shared by the client does not fraudulently get into the hands of spy webmasters. This guarantees your privacy and security. In the event that you don’t locate this feature anywhere on the lender’s official website, be vigilant and look elsewhere for the financing. A great offer is only worth it if your private information remains private and well protected.
Strict on creditworthiness
When applying for a loan, two checks on your credit will be conducted: a soft pull and a hard pull to know your existence and credit history, respectively. This step is one of the most important ones in the whole process of approving your loan application. If the lender overlooks such details, then it might be a red flag concern.
However, some types of loans don’t really give much attention to this detail, for example, when applying for a hard money loan from a LicensedMoneylender is worth a try. It’s important to investigate to know your other options.
Elaborate loan terms
Your lender must provide you a credit contract highlighting the amount of your loan, loan penalties that may accrue, the interest rates that the lender charges, and the total amount owing to the lender at the maturity of the loan. The date the payment is due and the options open to you while paying should also be clearly stipulated in the contract document.
Evidence of online presence through; Reviews and ratings.
Traverse online and get any information you can on this lender. Check people’s reviews, and gauge whether they are positive or negative, if negative, then that is the first sign of a red flag.
No upfront fees
A genuine lender generally adheres to the provisions of the contract until you receive and pay your loan back. Some, however, might deduct origination fees from the funds before it shows up in your bank account. Such is when you applied for a personal loan which does not contain any provisions for collateral.
Knowing a Registered Lender
You have seen those indicators of a licensed lender. Below are some factors that you should look out for to decide if your lender is registered.
Conducts a check on your creditworthiness.
As earlier indicated, your lender should be able to check your credit history to ascertain if you are in a position to pay back your owing. A good credit rating implies that you honor your credit obligations on time. In case the loaner does not have an interest in your credit responsibilities, be alert and don’t entrust your information to them.
Present registration details
Legal provisions of any country or state stipulate that any lender operating within its borders must be in possession of a license or permit of the business. If your lender does not have these crucial documents, chances are that the business is fraudulent and non-compliant.
The law protects consumers from opportunistic businesses such as fraudulent loan lenders. If your loan contract lacks essential details such as the amount you owe, the interest charged and dates to repay, or it gravely erroneous with grammar and spelling mistakes, this should raise your eyebrows and smell the cooking, for it may not be good. Complete terms of the loan must be provided before signing the agreement.
Your lender should have a physical address, its absence simply means that the lender is trying to remain untraceable. This is not good since in case you want to open legal proceedings with the company, it will vanish before you get wind of its presence.
A legit and licensed lender does not engage in pressure tactics. These tactics are designed to prevent you from seeing any errors or faults in the contract.
The loan requires payment upfront
Loans that demand processing and origination fees are a scam, they will get your finance and vanish.
you have no loan guarantees from any lender, your loan will only be approved only when your creditworthiness is checked and is sufficient to be able to grant you a loan.
Payment in cash/gift card
Online money payment means should be preferred by the lender, no lender should convince you to remit your amounts in cash or by using gift cards, these modes of payment are untraceable.
The Bottom Line
If you do not want to fall in the hands of scammers in the name of looking for the financier, you should always be looking out for these indicators and take caution early enough. There are laws out there to protect you, but you also have to look out for yourself, so your information would not end up in an unexpected place and comes back to haunt you. So, pay attention to the indicators we have discussed in this blog. Thank you!