1) They use deception to make you sign up
It’s important to watch out for online loan companies that use deception to get you to sign up. Some sites will require you to fill out some kind of form in order for you to even see what type of loan options are available. But once you submit your information, they make it very hard for you to get out of that page and back onto their website. That is not only shady but could potentially be illegal as well, depending on where they do business. If a site won’t let you opt-out of them, consider another option. You might have issues getting approved when it comes time for underwriting.
best online loans companies
2) The terms and conditions are unfair
If you take out an online loan from a company, be sure to look over their terms and conditions thoroughly. You should also seek out reviews from other borrowers who have used that specific loan provider; many times, these reviews will outline hidden or unfair clauses. For example, one borrower might have been charged extra fees for paying off their loan too early—which was not outlined in the terms and conditions when they originally signed up! If you’re looking for fairness and transparency, steer clear of companies with sneaky, unfair clauses written into their terms and conditions.
3) It’s much more expensive than you think
Not all online loan companies are created equal. Some may offer higher rates and fees than traditional banks or credit unions, or have limited customer service. Loans can often come with hidden costs as well, including application fees, origination fees and late payment penalties. It’s also important to understand how much your monthly payments will be once you sign up for a loan—some sites make it easy to get an idea by providing loan calculators; others don’t. If that information isn’t available right away on the website, ask!
4) They don’t explain the fine print in full
When you’re getting ready to sign your name on that dotted line, make sure you understand all terms. Find out how much interest will be applied to your loan, what kind of repayment plan they expect and look over everything that is being asked of you before moving forward. If something isn’t clear or is causing alarm, get more information in writing before proceeding with your application. You don’t want to end up paying back way more than you originally borrowed. And if it seems too good to be true, it probably is. Stay away from lenders offering low rates or single-digit monthly payments if they ask for any other documentation than what you already have in hand or are going to receive from them once they have your money.
best online loans companies
5) There are hidden charges
If you’re a borrower, be wary if any lender suggests you put up collateral or pay fees to secure your loan. Those requests might indicate that what you’re dealing with isn’t a real lender but an opportunistic middleman—who is likely to keep any money you send as payment for themselves. Be especially wary if they ask for copies of your bank statements as collateral. That should set off alarm bells: You’re essentially giving them easy access to transfer funds from your account (to their own) without much effort on their part.
7) Once they have your money, they offer no support whatsoever
If you have problems paying back your loan, some online lenders aren’t interested in helping you. Sometimes they just won’t answer your emails and other times, they will charge you late fees or even threaten to report your delinquency to credit agencies or garnish your wages. If you borrow money from an online lender that promises great rates and excellent customer service, but it turns out they don’t deliver on those promises, complain to regulatory authorities. The CFPB has already cracked down on online lenders who claimed they were regulated by certain states when they weren’t, which means it’s getting harder for scammers to sneak under regulators’ radars.
6) You can’t pay it off early without paying penalties
If you take out an installment loan, check to see
if your lender will allow you to pay off that loan
before it’s due in full. Most credit cards and many
other types of loans offer no-penalty early
repayment options; be sure that an installment
loan does, too. Otherwise, make sure you have
enough cash on hand to afford at least one payment
when you get your first bill; otherwise, you
could wind up paying late fees and penalties for nonpayment.
best online loans companies
8) Their customer service is lacking
You’ll need to contact your lender via email if you
have any questions or issues while applying.
Since online loans are often processed very
quickly, it can be difficult to get in touch with
someone right away when you need help. Not
only that, but many online lenders have no-live
phone customer service so there is nobody you can
speak with until your application has been
reviewed and approved—or denied. This means
that if you don’t understand an error message or
get confused by an instruction, there may not be
anybody to ask for clarification. While some sites
offer chat options, these aren’t always available around-
the-clock and they don’t provide any level
of human interaction beyond keyboard taps.