A personal loan can help you pay for urgent, unexpected expenses or large purchases. However, it’s crucial to choose a lender you can trust.
So, how do you know if a loan company is legitimate? And how do you choose the right lender and decide which one can give you the best loan package and service?
Just like you read reviews before you purchase any product, it’s essential to do background research on any lender. Ask when they were established, how many branches they have, or if they are part of a more extensive network that serves several states. Generally, the older and more extensive a company is, the more reputable it will be.
You can also gauge reputation by the quality of the website. Does it have information about the company and the loan packages, or does it look like it was hurriedly set up? Many fraudulent companies will create a very skeletal website with practically no useful information—so that’s always a red flag.
A reputable lender will always be clear about the loan package and be able to answer any questions you may have quickly. In addition, they will go out of their way to ensure you understand the terms of the loan and the process involved.
A fraudulent lender will evade questions or take a long time to reply to inquiries. Instead, they may try to fast-talk you into signing the documents immediately by tempting you with “special offers” or “one-time rates.”
To check transparency, ask your lender these questions:
Lending institutions will have their own requirements for approving a loan. This can differ among the institutions or even from company to company.
For example, banks will usually look at your credit score, list of liabilities and assets, income level, and employment history. Since you will need to present many documents, and they will have to review and process them, getting a personal loan approved can take a very long time.
If you do not have a high credit score, or if your employment history does not meet the bank’s criteria (i.e., you have just changed jobs, or you are not a regular employee), you can approach other lenders who have more flexible requirements.
For example, Simple Fast Loans has loan packages for people with a bad credit history or whose income comes from freelance work, pensions, alimony, etc.
One of the first questions you should ask any lender is, “How long do you expect the application process to take, and when will the money be released after the loan is approved?”
This is particularly important if you need the loan to cover sudden urgent expenses, such as medical bills or house or car repairs.
And it’s equally important to consider the time it will take to finish the application. How many times will you need to go to the lender’s office? What legwork do you need to do to gather all the documents?
It is usual for lending institutions to have processing fees, but a legitimate lender will not ask you to pay this upfront. Typically, these fees are deducted from your total amount, not as an initial fee before you begin your application.
This is also where transparency and good communication come into play. The best lenders will give you a breakdown of fees, interest rates, payment terms, etc. You should be able to ask questions about each item and get a clear reply.
Giving this information is the role of a responsible lender. In turn, because you understand the loan terms, you can choose the loan package that offers the best value and works with your current financial situation.
Time is money. Whenever you wait in long lines or drive back and forth to the branch to submit documents or check on the loan status, you waste time you could have spent at your job or doing necessary personal errands.
Lending institutions that are customer-centered and service-oriented will look for ways to simplify the loan application process and make it as painless and convenient as possible.
For example, Simple Fast Loans has an online application that enables you to request information about the loan at any time. Once you fill out a form, a loan representative from the nearest branch will contact you. This also spares you the trouble of calling a hotline and being put on hold.
Lenders understand that many people applying for a personal loan may require the money immediately. So, one of the things to look for in a lender is efficient processing and payout. How long will it take to release the funds, and what do you need to do to claim them?
Beware of lenders requiring you to purchase a card or open an account with them to claim the money. Aside from this likely being a scam, it is an unnecessary additional step that requires documents, time, and effort.
For speed and convenience, it is best to look for a lender that can either give it in cash or transfer it online.
The customer service you receive will affect many things: how well you understand the loan terms, how fast and convenient the processing is, and whether or not the loan stresses you out or relieves you.
When you evaluate customer service, look at these factors:
As you can see from this list, finding a suitable lender can’t be seen by just looking at who gives the lowest rates. Sometimes, when a lender overpromises and gives you an offer that seems too good to be true, there is an excellent chance that it is not true—it could be a scam, or there’s a fine print you don’t know.
When you choose a lender, look at the complete picture: the reputability of the company, the loan packages and requirements, the ease of the process, and the kind of customer experience you will have at each step.