A personal loan from an online loan company is the easiest way to get cash fast. But there are a lot of shady companies out there who are very eager to lend you money, while hiding predatory practices and super high interest rates in the fine print.
If you need a personal loan, we recommend applying with LendingTree - a reputable loan marketplace that matches borrowers with the right loan providers.
If you already applied for a loan with another lender, and want to make sure the transaction is legitimate, keep an eye out for these 6 signs.
1. The lender has a physical address
The telltale sign of a fraudulent loan company is that they won’t list a physical address or a phone number, because they want to make it difficult for borrowers who want to take legal action to track them down. If the company’s website does list an address, run it through Google Maps just to be sure it’s legitimate and not someone’s home or a vacant lot.
Legitimate online lenders will list their corporate address somewhere on their homepage - and not buried on some hard to reach page within the site.
2. The lender performs a credit check
Lenders will not require a credit check in order to pre-approve you for a loan. But once you’re in the final stages of securing a loan, the lender will have to pull your credit to review your financial history and ensure it matches the information you submitted on the application.
If poor credit has made it hard to secure a loan, it can be tempting to borrow from a lender that doesn’t perform credit checks. But this is a huge red flag, and a sure sign that something is not right.
LendingTree, for example, performs a credit score check and accepts credit scores from fair to excellent.
3. The Lender does not charge upfront fees
No legitmate online lender will ever ask you for money in order to process your application. Never, under any circumstance, will you have to send or wire money to a loan company to secure a loan. Legitimate lenders do charge origination fees, but that fee is taken off the loan amount and not paid upfront.
4. The loan has clear terms and conditions
Transparency is the key to a positive experience with an online lender. Before you accept the loan, make sure the terms are clear and understandable. Be sure the terms match what you were promised - highlight the APR, payback period, loan amount and how much the loan will cost you over its lifetime.
5. The lender is registered in your state
In compliance with the U.S. Attorney General’s Office, lenders must be registered in every single state they conduct business in. If the lender is not registered with your state, find a lender that is. Registration information is usually found on a lender’s website, but you can also contact the Attorney General or Department of Finance to confirm.
6. The lender doesn’t pressure you
High pressure tactics and limited time offers are the biggest weapons in a scammer’s arsenal. If a deal seems too good to be true, it usually is. The “act fast” approach is a tactic used by scammers to coerce people into revealing their personal information and sign loan agreements before they can get a whiff of something shady going on.
A legitimate lender won’t offer special promotions. Loan rates are dictated by fluctuations in the market, your credit score and a few other factors. They are never dictated by marketing promotions.
Transparency is key to finding the right personal loan. A legitimate lender will be there for you, to explain every step of the process and ensure that you understand exactly what you’re signing.
If you’re looking for a lender you can trust, visit LendingTree. LendingTree operates as a loan marketplace, connecting borrowers with only the most trusted lenders in the industry.