A recent study shows that 19.52 million Canadians have taken out a personal loan. Most (41.25%) used the loan to purchase a vehicle, whereas 19.5% used it to finance their mortgage.
What these people may be unaware of is how easy online loans are to apply for. Aside from personal loans, there are many types of loans to apply online for too, such as payday, or a line of credit.
You may be wondering if online loans are safe, though. In this article, we’ll explore the safety concerns surrounding online loans and provide tips on how to ensure that you’re working with a reputable lender. Keep reading to learn more.
Safety Concerns of Online Loans
There are legitimate concerns about online loans—one of the biggest being fraud.
Scammers will use fake websites or phishing emails to lure borrowers with low-interest rates and quick loan approval. Once the borrower receives personal and financial information, scammers can use it for identity theft or other fraudulent activities.
Regulation is another safety concern of online loans. An online loan lender may operate in a province or territory where they’re not licensed. This can lead to things like unfair lending practices and hidden fees.
Unfortunately, borrowers who fall prey to these types of scams can face serious financial trouble. For example, high-interest rates and mounting fees.
Online lenders may use aggressive or misleading marketing tactics. They will often target those who have poor credit or limited financial resources. Claims such as “no credit check” or “guaranteed approval” are some you may come across.
Benefits of Online Loans
Despite the safety concerns of online loans, there are also many benefits. When you apply online for a loan, you’ll save so much time in the process.
Once you fill out the form, you could be approved in a matter of minutes. The funds will be transferred to your account in a few days.
Loan amounts and repayment plans will be more flexible with an online loan lender, too. Borrowers can take out a loan ranging from a few hundred to a few thousand dollars. Repayment terms will range from a few months to several years.
Another advantage of online loans is the wider range of lending options available. Online lenders may be more willing to work with borrowers who have lower credit scores or less established credit histories. They may also offer more flexible repayment terms and lower interest rates than traditional banks.
These factors especially benefit those who need to borrow money quickly for unexpected expenses, an emergency or have limited financial resources.
Identifying Reputable Online Lenders
When applying for online loans, how can you ensure that your data is safe and sound? It’s important to identify a reputable online loan lender. Be sure to practice the best cybersecurity tips to avoid scams and hacks.
Follow our advice below.
Check for Licensing and Accreditation
One of the first things you’ll want to do is to check that they’re licensed and accredited in your province or territory. Verify this information on their site or contact your province or territory’s banking or financial regulatory agency.
Take advantage of reading reviews of the online lender from previous borrowers. This will give you a good glimpse into the lender’s reputation and how well their customer service is. Note that some online reviews will be fake, so do your best to weed them out if they seem too good to be true.
Check the Lender’s Site
Always check the lender’s site before applying for anything. You want to make sure that they have clear and transparent information about the types of loans they offer, fees, and terms. If anything feels “phishy”, vague, or unclear, it could be a red flag.
The site should also have a secure connection. This is indicated in the address bar with a padlock icon.
Avoid Upfront Fees
Be wary of any upfront fees of online loans.
Legitimate lenders do not charge upfront fees for loan applications. If a lender asks for upfront fees, it may be a sign of a scam. Some legitimate lenders may charge origination fees, but these should be disclosed upfront and deducted from the loan amount.
Check the Interest Rates and Dees
Online lenders may charge higher interest rates and fees than traditional lenders. Before applying for a loan, make sure you understand the interest rates and fees associated with the loan, and make sure they are reasonable. Compare the rates and fees of several lenders before making a decision.
Consider the Lender’s Customer Service
A reputable lender should have a responsive and helpful customer service team. If you have questions or concerns about the loan process, contact the lender’s customer service team and see how they respond. If they are unresponsive or unhelpful, it may be a sign that the lender is not reputable.
Apply for an Online Loan Today With Tekaloan
Online loans can be a convenient and accessible way to access credit, but they also come with risks that must be considered. Whether you’re looking to take out a payday loan, personal loan, or line of credit, it’s important to do your research and make informed decisions.
By following the tips outlined in this article, you can protect yourself from predatory lenders and ensure that you’re working with a reputable online lender. Remember to always read the fine print, compare loan offers, and be wary of unsolicited offers or requests for personal information. With these precautions in mind, you can confidently navigate the online lending landscape and find the best loan options for your needs.
The good news is that you don’t have to look very far to get started. Apply for a loan today with Tekaloan.