How to Check if your Loan provider is a Responsible Lender?

How to Check if your Loan provider is a Responsible Lender?

When facing severe financial troubles, most people consider taking out a loan from the bank. However, people with poor credit scores do not have that option. Banks and other traditional lending institutions have strict eligibility requirements. Qualifying for these loans becomes impossible when you have a less than remarkable credit history. If you are in a similar situation and need money urgently, you may rely on alternative lenders. Various online lending platforms and alternative lenders provide bad credit loans. However, finding a responsible lender and appropriate loan may be more difficult than you think.

What should you look for in an alternative responsible lender?

A quick search for bad credit loans online will reveal a ton of providers who are willing to offer you loans at incredible rates. You might even come across deals that seem downright too good to be true! However, there is always a catch with these types of loans and lenders. Though most lenders claim to be the best in the industry, not everyone has the right intentions. The alternative lending industry has its fair share of predatory lenders who want to get you into a loan deal that seems fair on the surface. However, with time, you will discover the hidden charges and other flaws that the lender did not disclose to you before signing the deal.

Such predatory lenders can not only ruin the experience for you, but they can also create bigger troubles for you. More often than not, when you go for such loans, it is usually a trap that sucks you into a debt trap. Then there are scams that are designed to con you into giving money even before you receive the loan. Of course, when you do pay, the lender disappears on you. Gathering knowledge about legitimate lending practices is the only way to avoid being ripped off by a predatory lender. Here are some of the signs that you should look out for when choosing an alternative lender.

The lender should have a secured website:

A legitimate bad credit loan lender will always put your safety first. Such lenders always prioritize website security. See if your lender’s website has SSL Certificate as this ensures that private information is always safely transferred. You can easily find out whether a website has SSL security by checking the website URL. If the URL starts with “https” as opposed to “HTTP,” you will know that the website is secure.

The lending company will have a physical address:

Most scammers will provide you with a P.O. box number instead of a valid physical address. They may even give you a bogus phone number. A credible alternative lender will always give you the physical address. Reputed lending companies and even the online lending platforms will have a physical address for their offices. They will also give you real phone numbers where you can call and talk to their representatives.

They will have transparent lending terms:

Predatory lenders always make profits through hidden fees and additional charges that you do not get to know about until it is too late. A responsible lender will condemn such practices and have transparent policies in place. They will also provide you a printed document of the terms, conditions, privacy policies and other legal disclosures. If the lender fails to provide you this document, turn the other way and run!

You can always research them online:

If your lender has been in business for some time, it is fair to assume that they will have an online presence. Moreover, if it is an online lending platform, there are bound to be some online reviews, ratings and other information about them. Reliable lenders always leave a paper trail that you can track and look into to verify their reputation. Aside from a secure website, responsible lenders will also have a thriving social media presence and online reviews. If the website seems sketchy and you cannot find any more information about them online, they are probably scammers.

They will never force you to borrow more than you need:

Predatory lenders will try to get you to sign a huge loan deal with hefty interest rates and short repayment terms. Their only aim is to get you to default. When you fail to repay the loan, they will compel you to take out another loan to service that previous loan. Thus, they will get you into a never-ending debt trap. Legitimate and responsible lenders will never coerce you into borrowing more than you can confidently pay off. If a company does so, you would know that they have the wrong intentions.

There are many other ways to find out whether a lending company or alternative lender is legitimate. No matter how desperate you are for the financial help, you should maintain caution and research as much as you can before signing the deal.