The world of online lending platforms has given many individuals a better, easier way to borrow money. From a functional point of view, they offer a large number of advantages when compared to traditional lenders. They not only make it easier to borrow money but also enable individuals who have a poor credit rating to get loans that would otherwise be unavailable to them. However, this accessibility comes at a price, namely higher interest rates. This having been said, this is not the only thing that can make online lending services dangerous.
From the terms and conditions to how the lender informs the borrowers of various extra charges that may need to be paid, numerous services and applications of this type have been reported to make their users pay more than they bargained for. While most of these companies are regulated by the authorities, some aspects of their business cannot be controlled and may harm the clients. Here is what you need to know:
- Always Read Reviews before Using a Service
Regardless of whether you want to borrow money using a smartphone app or a web-based service, you should always look for reviews before submitting an application or creating a user account. Keep in mind that the testimonials that are present on the lender’s website may be selected to advertise the services of the company. The platform or app is not necessarily safe to use if the testimonials say so. The best course of action here is to go to a third-party review website such as TrustPilot and to look for public reviews for the lending service. These review websites usually offer both ratings as well as reviews, making it easy to determine if the lending service that you want to use is safe or not.
- Understand What Fees You Have to Pay
It is a common practice for online lenders to only present the fees that borrowers have to pay under normal conditions and for the usage of their services alone. There is a chance that the agreement also contains additional charges that must be paid in special scenarios. Some lenders offer different interest rates based on the region of the borrower, while others introduce an additional fee if the borrower needs the money transferred in certain types of bank accounts. Generally speaking, always make sure that you read the full agreement before moving forward.
- Double-check all Data
Make sure to double-check all the data that you submit as part of your loan request and also pay attention to the loan confirmation.
- Keep an Eye on Your Bank Account
Some online lenders have been known to stealthily charge their clients various fees over the course of the loan. This is not a common practice, but it is a possibility. Furthermore, in some cases, your bank may not notify you of every payment that is made from your account. Keep your eye on your bank account statement and always signal the bank if you feel that you have been charged by something that you should have not have. The bank will be able to block all payment requests that come from a scam lending service.
- Security Considerations
Lastly, make sure that the website that you have to submit your financial and personal data is safe. You can do this by making sure that its address starts with HTTPS, which means that it is a secure connection. In addition to this, be wary of lenders that request that you pay an upfront application fee or any sort of down-payment before your application is approved.