Online Loans – What To Watch Out For

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Online loans have become increasingly popular as an easy, uncomplicated and relatively straight forward way to apply for a loan from any number of financial institutes and lenders, all from the comfort of your own home.

Online loans can be directly between one borrower and one lender, which are typically applied for right on the financial companies website through a secured server. There are also online loan companies that basically take your information and then offer your loan to tens or possible hundreds of different lenders that can then make an offer of a loan or pass on the loan.

The company you applied to then selections the top five or ten online loans, passes on the information to you and you then select which loan you choose. Those companies basically are like loan brokers, they send your information to the real loan companies in order to get paid for a small percentage of the total amount of the loan. Of course, you actually pay this in your fees and interest, but you are not told of this when you apply.

It is important when applying for online loans that you understand some basic security issues and that you ensure that you are using only “real” lender websites. Some of the common things to watch out for during online applications are:

• Online loans that require an advanced payment or fee for processing. Often these types of loans will offer a guaranteed acceptance or guaranteed approval, however they will require a one time processing fee of some amount of money, usually over $100.

After you pay the processing fee, you will get notice that your loan have been approved and will receive the advance information in a few days.

You won’t receive the email, the company will not respond to your increasing number of emails and you will typically find that the phone number or address of the so called lender is not valid.

• Watch out for online loans that are not affiliated with a real, physical bank or lending institute but that want information such as your social security number, credit card numbers, bank account numbers or other sensitive personal information.

Sometimes this is not on the first part of the application, however you will receive a notice once your loan can not be processed because of the lack of personal information. Once you find you are unable not contact with the “loaners”, it is possible that your private information has been sold by them. That’s the risk you may have when you apply for a loan online.

• Be cautious that you are really on the lending or online loans website you think you are on. Don’t go to these sites from links provided in your email, actually type the name into the browser yourself.

Scammers would use the URLs and names that similar with to the actual financial companies to make you give out information without notice, your password or any other sensitive information may be stolen by them in minuites.

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