When you’re searching for an installment loan, there’s one worry that’s probably lingering in the back of your mind: can you trust the installment loan company you’re looking at? It’s not an unfounded anxiety because there are plenty of companies out there looking to take advantage of an unsuspecting customer to make a quick buck.
Luckily, it’s easy to learn the common red flags to be on the lookout for when you encounter an unscrupulous loan company. And once you know what to avoid, it’s easy to steer clear of the “bad guys” and find the right loan company for you. Here’s a simple guide to find the right company for your emergency borrowing needs.
The first step to finding the right installment loan company is to rule out scam companies. These companies’ primary objective is to separate you from your money before you receive the funds from your loan, which then never materializes. This is actually against federal law, which states that companies cannot demand payment of any type before an applicant receives the full approved loan amount.
Nonetheless, scam companies will often disguise their attempts to collect money up front as fees or processing charges. Don’t be fooled. Legitimate companies often will have some type of processing fee, but that money is deducted from the loan amount after the loan is approved and the funds are transferred to your bank account, never beforehand.
Another sure tip-off that a company is only out to make a quick buck is that any real details about them are vague: no long-term history, no physical location, and no membership with the Better Business Bureau or other business association. Any lending company worth your trust should have proof of a sustainable business model, with a history of satisfied customers to back it up..
To make sure you’ve found a trustworthy installment loan company, it is essential to do your research beforehand. Look them up and read user reviews. You don’t owe them your business, and if you feel even vaguely uncomfortable, wait until you find a provider that you feel comfortable with.
This final tip when it comes to picking the right installment loan company is more about you than them. You’re never going to know if an installment loan offer is a good deal if you’re not aware and knowledgeable of your credit score. Installment loans tend to be less credit dependent than many other forms of traditional lending, but it will impact the terms of the loan and total amount you could qualify for.
Finding your credit score is easy: there are three companies that track it (Experian, TransUnion, and Equifax) and you’re entitled to one free check from each of these agencies each year. The whole process can be completed online in a matter of minutes, and you can download or print your report for your records.