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What To Watch Out For Online Loans
By plrprousers | March 11, 2009
Online loans have become increasingly popular as an easy, uncomplicated and relatively straight forward way to apply for a loan from any number of financial institutes and lenders, all from the comfort of your own home.
Online loans can be directly between one borrower and one lender, which are typically applied for right on the financial companies website through a secured server. There are also online loan companies that basically take your information and then offer your loan to tens or possible hundreds of different lenders that can then make an offer of a loan or pass on the loan.
The company you applied to then selections the top five or ten online loans, passes on the information to you and you then select which loan you choose. These companies basically act as loan brokers, getting a small percentage of the total amount of the loan which is paid by the loan company to the broker. Of course, you actually pay this in your fees and interest, but you are not told of this when you apply.
It is important when applying for online loans that you understand some basic security issues and that you ensure that you are using only “real” lender websites. Some of the common things to watch out for during online applications are:
• Online loans that require an advanced payment or fee for processing. You could ask the lender for a guaranteed acceptance or guaranteed approval loan, it often requires a one time fee, the amount of money usually over $100.
After you pay the processing fee, you will get notice that your loan have been approved and will receive the advance information in a few days.
They won’t contact you through emails or phone, then you may find the company’s phone number or address does not exist.
• Watch out for online loans that are not affiliated with a real, physical bank or lending institute but that want information such as your social security number, credit card numbers, bank account numbers or other sensitive personal information.
Sometimes this is not on the first part of the application, however you will receive a notice once your loan can not be processed because of the lack of personal information. Once you find you are unable not contact with the “loaners”, it is possible that your private information has been sold by them. That’s the risk you may have when you apply for a loan online.
• Be cautious that you are really on the lending or online loans website you think you are on. Don’t go to these sites from links provided in your email, actually type the name into the browser yourself.
Often scammers use URLs and names that are very close to actual financial institutes and make links that are so similar that it is very easy to mistakenly give out information, passwords or other sensitive information, leaving yourself open to identity theft.
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