When you’re shopping for a loan, don’t get caught in the ’net.
Although online banking has been around for years, the security of online loans can be difficult to assess. They are certainly convenient when compared to traditional loans, but in an oversaturated market, the task of selecting a reputable lender can become daunting. Bruce McClary, the vice president of communications with the National Foundation for Credit Counseling, cautions, “It is easier to hide behind a web page than a store front.” He advocates increased caution when perusing online. Some online lenders do not require a credit score from an applicant, and although that may sound enticing, it could be a predatory practice in disguise. Checking your credit score protects you from accepting a loan that you cannot afford; without it, you may face additional fees on missed payments and inflated interest rates. “If you go to a lender that doesn’t evaluate your credit score, you could be cheating yourself out of a much more affordable loan,” says McClary. When weighing your options for an online loan, remember to familiarize yourself with fair lending laws and put your trust in the Better Business Bureau. These same cautionary recommendations can also be made about any brick-and-mortar lender, so always check with your own bank first. Their customer service could save you time, and maybe money.
This article originally appeared in our June 2019 issue.
