Online Personal Loan: How to Know if You Are Getting a Good Deal

In 2022 alone, there have been 39,455 scam reports and almost 11% of them resulted in financial loss. These numbers only account for January and February of this year.

It’s sad but safe to say that the scam reports will increase and continue to cause people to lose thousands of dollars. Investment scams and false billing are two of the highest scam categories.

These facts make it scarier to search for an online personal loan. With the right tips, you can find a lender that offers you a good deal.

Keep reading to learn more.

Find a Lender Who Cares About Credit History

Even if your credit isn’t where you want it to be, a reputable lender will need to see it. They might look through reports from all three major credit bureaus to find out this information.

For an online personal loan, a credit lender needs to know your history of paying bills to ensure you’ll repay a loan on time.

Lenders who offer personal loans with bad credit will look into credit history along with other factors to determine eligibility.

Some loan types don’t require a credit check. However, a personal loan always comes with this step.

Make Sure the Lender Is Registered

The Federal Trade Commission (FTC) requires lenders to register in states where they conduct business. When looking for online personal loans, this is a major consideration.

A lender who is not licensed in your state is likely scamming you.

A lender’s website should have registration information and a list of states where they can legally conduct business.

Don’t Pay Anything Upfront

Scam personal loans have “lenders” that ask for prepaid debit cards or gift cards upfront. They’ll say they need this for insurance purposes, fees, or collateral.

A reputable financial institution won’t ask for these items upfront. They might require you to pay a fee for your credit report, application, or appraisal, but these amounts get deducted from the loan plan.

When dealing with a lender, never use untraceable payment methods. If you do offer up a prepaid card, there is no way to report it as stolen or get your money back from the scam.

Check That the Lender Has a Physical Address

Lenders who offer online personal loans should still provide a physical address. Run this address through Google Maps to ensure it doesn’t show up as a vacant lot. Scammers have been known to do this.

Fraudulent businesses are untraceable because they don’t offer a real physical address.

Lenders at parkebank.com have multiple locations and personal loan offers in New Jersey.

Avoid Lenders Who Pressure You to Act Immediately

An online personal loan scam is accompanied by a lender that pressures you to immediately sign off on a loan agreement. They might tell you that an offer expires quickly.

Lenders that use high-pressure tactics are often scammers. Always avoid an offer that comes with an immediate deadline.

The FTC recommends steering clear of these tactics and taking your time to accept a loan offer.

Get a Good Deal for an Online Personal Loan

The only way to get a good deal for an online personal loan is to do your research and avoid scams at all costs. If you have bad credit, your interest rate could be high but you will receive a legitimate offer.

A reputable lender won’t work through scare tactics and will be registered to lend in your state. If they check all of the right boxes, it’s safe to sign the contract.

For more financial advice and blogs on other popular topics, check out the posts on our website.