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How to Know Whether Your Lender is Genuine or Not

These days, most industries see a lot of scamsters and con artists and make it difficult for people to believe genuine offerings. There is nothing different about this situation in the lending industry as well. Fraudulent lenders are not unheard of, which is why many people are reluctant about applying for a loan online. However, many a times online loans are the only way to get finances when in urgent need of money for one’s business. So how does one differentiate between a fraud and a genuine lender? May be these few tips may help you:

An upfront fee: When you apply for a loan, you are the one in need of money. Only a fraudulent lender will ask you to pay a fee before approving your loan and transferring funds. Don’t ever forget that you’re the one asking for a loan. An application fee, a credit check fee, etc. can be an indication of a scam. Always do your homework about which lender requires you to pay before funding you and which doesn’t in order to avoid the slightest possibility of you being tricked.

  • Credit check fee: Note that most online lenders do not conduct credit checks, which is why a credit check fee is definitely an unnecessary requirement. Online lenders offer loans even to those with poor credit scores which is why they do not go ahead with a credit check. If one does ask you for a credit check fee, it is most likely fraudulent in nature.

Collateral requirement: In most cases, online lenders do not ask for collaterals. That is one major reason why many business owners prefer opting for an online loan over a traditional one despite the higher rates of interest. Along with keeping this in mind, it is anyway a better idea to avoid providing collateral when you have the chance to. However, if you do choose a lender who asks for security, do not give any confidential information before getting to know more about the company.

Safety and Security Regulations: Always ask your lender about their safety regulations. Ask them about the encryption that they use and make sure that you go ahead only when you’re a 100% sure about your information remaining confidential with your lender.

Have a look at the website: A legitimate lender will take out the time to make a proper website, unlike a fraudulent one who may make do with just a couple of pages. A good website may be an indication of it belonging to someone trustworthy. The language of the website may also play an important role in determining whether or not it is a genuine one.

While taking the above mentioned points into consideration, it is important that you do a thorough background research on your lender before applying for a loan. Always know that you have options and don’t have to rely on one specific lender in order to provide you with a loan.

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