If disaster strikes your finances, and you have no savings as a backup, it may be time to find an online installment loan. But your search for quick online cash isn’t always easy, and you have the Internet to thank.
Type in what you want into a search engine, and it generates millions of results. In just a few milliseconds, you have more options at your fingertips than people had their entire lives only a short while ago.
While this will turn up amazing opportunities, it may also dredge up some things better left untouched. The potential for accidentally stumbling upon online loan scams has never been greater.
So how do you avoid becoming a sucker in your time of need? Here are a few dos and don’ts to help you get through your next installment loan search safe and sound.
DO Read Reviews
Once you find a lender that offers quick online cash, it’s time to do a little sleuthing.
Online reviews help you carry out this investigation. They show you how a lender treats its customers, told from the customer’s perspective.
Some borrowers who have used online installment loans leave their reviews on Trustpilot. You can read these reviews directly on Trustpilot or at MoneyKey for more information.
Whenever you read online reviews, weigh the good and bad while paying close attention to the overall grade a financial institution earns. This average may help you decide if you should move forward with a lender or hold back.
DO Look for Registration
License and registration aren’t just some things a cop might ask if they pull you over. You should expect them in a lender, too.
A license and state registration show a lender is legally allowed to offer personal loans and a personal line of credit loans in your state.
To register with your state’s financial regulation, a lender must prove it abides by state and federal laws. These laws are put in place for a reason; they protect you from usury!
If a lender doesn’t have a license, stay clear. It means their cash loans don’t play by the rules.
While a lender with a license won’t guarantee you’ll have a perfect experience, it will help you avoid predatory or abusive practices.
DO Review Your Fees
Sadly, no personal loan or line of credit is free. You’ll have to pay additional fees or charges on top of paying back the initial amount you borrowed.
That’s a normal part of borrowing money online or in-person. It’s how a lender keeps the lights on.
But some fees don’t belong in your installment loan, no matter what. Advance payment fees are one of these shams; they’re essentially a fee you have to pay before you receive your loan.
That’s a tall order, considering you need to borrow money to pay a bill or repair. How will you pay this fee before you get your funds?
Short answer: don’t. Only scams will ask you to pay these fees.
DON’T Accept a Phone Offer
Your phone rings and you decide to pick it up, even though you don’t recognize the number. It’s some financial institution, and they’re calling with an amazing offer on cash loans.
Do you accept it?
It’s illegal for a lender to make loan offers over the phone. They must send you this offer in writing, so you can check (and double-check) for any rates, terms, and conditions involved.
DON’T Skip a Credit Check
Your credit score is one of the biggest measurements of your creditworthiness. A financial institution may check your credit to determine the likelihood you’ll make good on your loan repayments.
What they see will determine two things:
- Whether they’ll approve you
- If they do, what rates to set
If you have bad credit, your rates will be higher than people who have amazing credit. And that’s even if they approve you — there’s a real chance you may be rejected if your score is too low.
With rejection on the line, it’s easy to think the only way you may get approved is by turning to a financial institution that skips over a credit check.
But this is a big risk. A lender may only offer no credit check loans for one of two reasons:
- They plan on setting the highest rates possible to offset the risk of ignoring credit
- They aren’t a legitimate lender and plan to lure you (and your personal info) in with these baseless, yet alluring, claims
DON’T Overlook Spelling Mistakes
While texting with a friend, you can laugh at a slip of the thumb that results in a hilarious autocorrect mistake. But when it comes to a financial institution, you should expect better.
Spelling or grammatical errors on a lender’s website raises a red flag. The same goes for their emails and any other official communications. It suggests there’s a lack of professionalism and oversight, or it could mean it was a rush job.
A legitimate lender will take care to craft a well-designed website free of errors or broken links. More still, their information should be easy to find and easy to understand.
How to Spot Legitimate Online Loans
Coming up short of what you need in an emergency is a tricky situation. Don’t make it any harder on yourself by falling for a scam.
These dos and don’ts are a good start to protecting yourself, but they invite another question: how do you put them into practice? You can find the answer to that by researching your options.
Take a deep dive into each lender’s website. That’s where you’ll learn a lot about their products and services, but don’t forget to cast your net a little wider. Go onto review sites and double-check the registration with your attorney general.
These tasks may add time to your search, ultimately delaying how quickly you can start applying for help. But think of this time as an investment. It may help you find a legitimate lender that fits perfectly for your needs.