Getting an Online Personal Loan: How to Choose a Trustworthy Company

by Evan

With the rise of technology these days, you don’t even need to meet with a banker to get a loan. Sitting in front of a screen and browsing the Internet allows access to a handful of online money lenders. They can help you with your financial situation. Online personal loan providers offer people quick and easy ways to get funds for your needs.

When you choose an online personal loan provider, you face risks, too. You have probably heard some unsavory stories about:

  • endless spirals of debt,
  • high-interest rates,
  • unrealistic repayment schedules,
  • and an overall feeling that online lenders are scammers.

There are reputable companies out there holding all necessary accreditation. They can help you fulfill a financial need. Today, we will discuss how to choose a trustworthy company that can offer you a personal loan with little risks.

First, identify your financial needs

Depending on what your actual loan needs, you will pick a better company that meets all your criteria. Say you need a smaller amount to get you through a rough patch (pay the bills, make an urgent purchase, fix a crisis, etc.). You can opt for a payday loan from a trusted provider.

According to the Financial Conduct Authority, 67% of payday loan borrowers and 49% of short-term installment borrowers are over-indebted. If you’re looking to solve an emergency, you should look for their broader range of financial tools and services. Check interest calculators and transparent reimbursement schedules to make sure you aren’t getting duped.

Most payday loans do not exceed six months, while personal loans can reach up to 10 years. You need to decide at this point whether you need some quick money to:

  • fix your car,
  • pay a medical bill,
  • replace broken appliances, etc.

or a more substantial sum for:

  • a home improvement project,
  • a trip abroad,
  • moving,
  • a wedding,
  • a full set of new appliances/electronics, etc.

No matter what you choose, make sure the next step is to find online loan providers that check out in these criteria.

1. Transparency

In online lending, predatory practices and frauds are more frequent than we would like to admit. For you to choose a trustworthy company, you need to screen them. In the spirit of reliability, here are some things you should look for:

  • A secure website that does not fire up your antivirus and Internet protection software;
  • When you look for a loan on a company’s website, make sure they disclose the lending process. Check if they offer you a straightforward guide so you can find all the answers to your questions;
  • The provider displays the authorization it has to lend money within the boundaries of the law;
  • You can contact them in more ways than one, and they do reveal a physical address;
  • They offer customer service you can use in a timely fashion.

As loans go, an online personal or payday loan provider should make clear the most important details:

  • interest rates,
  • the available amounts of money you can take,
  • deadlines,
  • APRs,
  • calculation examples, and so on.

For instance, if you pick Cashfloat cash loans you’ve got the guarantee of working with a FCA authorised lender.

3. Credibility and Experience

Many people say anything they want in the online environment and have others believe them at face value. But when it comes to your loan provider, you should consult other sources.

  • Make sure that the FCA authorized the loan provider you are screening;
  • Check out online reviews and opinions of customers who worked with your potential future loan provider;
  • If you are using the Internet to look for an online personal loan, use the same tools for background checks (past scandals, accusations of fraud, pleased vs. unpleased clients and collaborators, etc.);
  • Ask around for references. If a company has a strong reputation, people have heard of it. You can find someone to talk to and share their experiences with the company;
  • Test their customer service: no credible online lender would skip or fake proper customer care.

Give them a call and ask to speak with a representative about your financial need. This way, you will learn how interested they are in solving your problem and how competent they are in meeting your needs. If there is no human there to talk to, look for another company.

The more squares an online lender checks in the credibility department, the more chances you have to benefit from a beneficial work with them.

4. Interest Rates

We are now approaching the crux of the problem. Most people skip the steps above and go directly for the companies promising the lowest interest rates. All good, but make sure you have your homework done. By this, we mean you should investigate the following:

  • The average market rates and the most reasonable fees you should expect;
  • What the competition offers and in what conditions;
  • What your selected provider offers once you openly discuss with it your needs and limitations.

Speaking of low-interest rates, you should never go for a small, obscure lender only because it promises the lowest prices ever seen on the market. There is always a catch and you should take such promises with a grain of salt, especially if the market average shows otherwise. As counterintuitive, it may seem, go for the big lenders, ones with reputation and accountability. The smaller ones may not follow the FCA ethical practices and you might end up in trouble.

5. Optimal Response Times

It is one thing to get the money in a quick, straightforward, and smooth process, and quite another to receive the requested amount on the spot. Even payday cash loans, which do not require you to have a perfect credit score, have their approval times. People should not trust lenders that promise instant money, no questions asked.

6. Proper Documentation

Not receiving proper and clear legal documentation covering all aspects of your lawn equals taking cash from loan sharks. In this day and age, with so many laws and regulations in place, no trustworthy online lender should be allowed to mess up the legal documentation.

Sure, you will have to read the fine print and understand the legalese, but you should have access to everything before you sign anything. If you are a cautious person, you can even show the documents to a legal advisor or a finance specialist to give you an opinion.

Have you ever taken a loan from an online lender? How was your experience? Would you recommend taking personal loans from such companies?

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