Many of us will be struggling to make our money go further this year, which can cause a problem if you’re faced with an emergency expense. But this is where online lenders can help. If you need money quickly, a payday loan may be an option for you. But are loans online safe? They do get a bad reputation but knowing more about them and what to look for so you can choose a reputable lender is key. Read on as we explore this further.
Alternative lenders, also known as non-bank lenders, are mostly based online and are becoming more popular with those of us that are looking for finance options but would struggle to get approved by a traditional bank, or financial institution. These online lenders can provide a huge range of loans for those that have bad credit or need money quickly to cover an emergency expense. They base lending decisions on affordability, rather than credit scores and credit history, so the loans that they offer are more accessible to a range of people.
Because these loans are based on affordability, they often come with higher interest rates, which can make them expensive depending on the size of the loan you are taking out. They can be helpful for those that are struggling to make ends meet, and need to pay for an emergency expense, you just need to make sure you’re choosing the right online lender for you.
Are they safe?
Online lenders can get a bad reputation due to the fact they’re not linked with a bank, and they come with high rates of interest, however, many online lenders are safe and can be used to help you when you need it most. There are a few factors to think about that can help you identify whether the lender you’re choosing is reputable, from checking whether they’re following the correct legal procedures, to checking online reviews. We’ll take a look at these factors in more detail below.
Because you’re applying for a loan online, you don’t know who is behind the website, or to who you’re giving your details to. To ensure that you’re dealing with a legitimate company, you should make sure that they’re registered with the FCA. This is the Financial Conduct Authority – your lender should have this stated on their website, if not, you can check the FCA website for a list of lenders that are registered. This is one of the first, and best places to start when it comes to choosing a trustworthy lender.
The next is to look at online reviews. These days, we use reviews to help us make important decisions, whether that’s to help us make a purchase or to get a better idea of how a company operates. Choosing a lender and making sure you read reviews from other customers will give you a non-biased look into what others think of the company. If they’re highly rated, great! If not, you may need to rethink.
All online lenders should tell you exactly what you’re being charged in terms of interest rates, early loan settlements, and late payment fees. Having clarity on this is incredibly important as high hidden fees can cause an issue when it comes to meeting the repayment terms. If the fees aren’t clear on the website, contact your lender. If you do not get the clarification you need, be wary of proceeding – you don’t want to get yourself into further financial difficulty with unclear terms.
The way a company treats its customers is a huge indicator of whether it’s a reputable choice when it comes to customer service. And even more so when your own money is involved! Make sure your chosen lender offers high-quality customer service – look for live chats and contact details so you can solve any issues you might be having quickly and easily. You can gain a lot of advice and knowledge from customer reviews when it comes to the service a lender offers, so use this to your advantage to ensure a seamless, and safe borrowing process.