5 Signs an Online Loan Company is Legitimate
Make sure you know how to identify a legitimate online lender
There are an endless number of online lenders and lending sites. When the bank doesn’t offer you the most flexible rates, there is almost always a non-traditional online lender ready and willing to approve your loan application. In fact, there’s never been so many options.
This is why it’s essential that you make sure you’re protecting yourself and choosing a lender online who is reputable and certified!
To help you out, we’ve put together a list of five telltale signs that you need to know before you start looking for a loan online.
1. It Performs Credit Checks
If you’ve been denied a loan due to a poor credit history, it can be tempting to borrow from a lender that doesn’t perform credit checks. But, this is a big red flag. Any legitimate lender will require a credit check which involves a hard pull of your credit report. A credit check is the only way that a lender can review your financial history to determine how high risk of a borrower you would be. The good news is that even with bad credit, you have legitimate options.
LendingTree, for example, is an online lending marketplace that performs a credit score check and connects you with numerous trusted lenders that accept poor and fair credit scores.
2. It Doesn't Charge Upfront Fees
Be wary of any lender that requires an upfront application fee just to apply for a loan. Similar to telephone or email scams that request payment before a service, if the lender asks for money before you receive your loan, walk away. What you might see from legitimate lenders is an origination fee, but that typically comes off the loan amount at the end, and is not an upfront payment.
BEWARE: A lender should never ask you to wire them money to secure a loan.
3. It Has Clear Terms and Conditions
Before you apply for any loan, make sure that the terms of the loan are transparent and you understand them. What is the APR? What in the payback period? What is the maximum you can borrow? If this information isn’t listed and there’s no one who can provide it, there’s a big problem.
When it comes to transparency, AmOne is our top choice. While it does not originate loans, AmOne is dedicated to helping borrowers find the best legitimate financing solutions.
4. It Has Customer Reviews
When you are in a financial bind there’s no doubt that you need access to money, quickly. Still, it’s best to take some time to research potential lenders to find out as many credible details as you can about the lender to avoid becoming a scam victim. A quick Google search should bring up multiple reviews and ratings.
You can also check with the Better Business Bureau (BBB), which will indicate if the lender is registered in your state and allow you to read resolved and unresolved complaints that it may have in its history.
LendingPoint, for example, is an online service that matches you with legitimate and trusted lenders. They boast a score of A+ from the BBB, making them one of the leading trusted online lending marketplaces.
5. It is Registered in Your State
The United States Attorney General’s Office mandates that all lenders are registered in every single state they do business in. This registration weeds out the scams and confirms the lender is legitimate. Registered lenders are monitored by the Attorney General, so you can rest assured that these lenders are not making fraudulent promises or have malicious lending practices. Registration information is usually found on a lender’s website, but you can also contact the Attorney General or Department of Finance to confirm.
Research is your best friend. Before you even begin the application process, the more credible details you have on the lender, the safer you and your money will be. Start with the trusted online lending marketplaces listed in this article. That way you’ll be sure you’re making the best, and safest, choice online.
Looking for more information? Check out and compare out top choices for personal loans.