(Newswire.net — November 4, 2016) — In the old days, people got their loans from a bank. In the even older days, people got their loans from loan sharks with dubious business practices. Today, we can get our loans from a lot of different sources. The banks are still there, and the loan sharks are still there, but there are a lot of new options as well. You see these options most clearly on the web. There are options that allow individuals to loan money straight to other people. There are small private institutions that pop up to try their hands at the lending game. And there are divisions of traditional lenders who revamp their offerings to the needs of the people who use digital spaces for these purposes. For people seeking out an online loan for the first time, the process can be kind of dizzying.
But there are ways to get it right. You may be a little confused when you start looking through all of your options for online borrowing, but with time, you’ll start to understand the lay of the land. The best way that we’ve found to really understand what you’re getting yourself into is to 1) look for independent reviews of these companies, and 2) talk to the company representatives on customer service chat to see that your questions are answered. Here are a few helpful questions to ask!
1) Will I Be Penalized For Paying This Loan Off Early? Paying off a loan early is one of the best feelings you can have. It saves you a lot of money. If you were to pay off a loan a couple of weeks after you set it up, you’d essentially have borrowed that money for free. The problem is, some online lenders penalize you if you pay your loan off early. This is uncommon but it can sneak under your radar if you aren’t careful. Make sure you ask!
2) What is the APR and are There Additional Fees? Is it Variable? The Annual Percentage Rate is made up of interest and fees that borrowers pay every year they carry their loan. That’s easy enough to understand. But sometimes, the interest changes. This is what is known as variable interest, and if you are not ready for it, it can really take you by surprise. There is also a fair amount of variety in the online lending sphere when it comes to sundry fees. It’s important that you understand in advance what you might be paying if you run afoul of the lender’s fee structure.
3) Are You Legit? This last question isn’t one you’ll be able to ask the company rep very easily. You’ll have to figure this out from user reviews elsewhere on the internet. There are tons of complaints for almost every financial company you can name. But the best companies also have a strong bastion of loyal customers who will write about their positive experiences. Try to determine if you are reading authentic reviews or ones paid for by the company. If you find the real thing, you know you’re probably dealing with a legitimate lender.
Online lenders can be great, just take the time it takes to find a good one.