Technological advancements have made it easier for people and businesses to seek a broader range of financing. One such evolution is the numerous online lenders that have sprung up to offer financial solutions. Online lenders are web-based providers who provide a quick and convenient way of accessing loans. Unlike traditional bank loans, they have easier approval processes and competitive rates. However, while getting financed through an online lender is simple, you don’t want to take a loan without getting the facts right. Here’s how to choose a legal online lender in the UK:
Check For The Licensing Of The Lender
When it comes to issues involving money, it’s good to be careful because things can quickly go south. Checking registration and licensing is one way of ensuring you’re dealing with a legitimate business. Like any other nonbank lender, online lenders should observe all applicable laws in each jurisdiction it lends. That includes licensing and usury regulations usually intertwined with determining whether the provider can offer a specific loan product and service. So visit the financial services register to check if the FCA (Financial Conduct Authority) has authorized the company you’re eyeing to offer lending services.
Online Lender Reputation
It’s quite easy to fall for cyber frauds today. Therefore, it’s vital to check if an online lending company is credible. First, you should do an online search of the lender’s records, including the business type and services, registration name, contact information, and reputation. You can find the data on the Better Business Bureau website or the company’s Google page. That will help you choose between lenders offering similar services. Little Loans is your go-to reputable lender with genuine reviews.
Another vital thing to check is testimonials from previous customers. Whether negative or positive, try and read as many reviews as you can until you are satisfied that they have the right image. If there are numerous negative reviews with everyone forming an unfavorable impression, that’s a red flag.
Please note: Never rely on one source for your information; try and check at least three or so platforms to ensure their testimonials are not self-generated. Some rogue companies are out to mislead unsuspecting clients by hiring people to pose as previous customers.
No Hidden Fees Involved
One of the essential parts of applying for an online loan is understanding the terms and conditions of each product and the amount of interest you’ll be charged over the life of the loan. Every online lender has a specific interest rate and a unique system of repayment. Find out these exact values on the company’s website and ensure that you choose a lender with the most competitive interest rates. In as much as every lender is essentially in the financing industry to make profits, a legit firm will always offer loans at reasonable interest rates. Unfortunately, others might trick you and include hidden charges, so you’ll choose them thinking their interest rates are competitive only to realize they are out to extort you after signing the contract.
Therefore, review the fine print and read the terms and conditions of that online loan carefully. That will help you to learn if there are any hidden fees and prepayment penalties. Any lender with hidden charges or exorbitant charges should be a red flag, and you need to avoid them at all costs.
Easy And Convenient Application
Online lenders should be able to keep the application process easy and efficient. It should be as fast as just a few minutes to fill in the loan application. That’s because you won’t need to visit the lender physically to apply for the loan since the lending process is web-based. Besides, the process should entail minimal paperwork (in many cases, you’ll need recent bank statements and a driver’s license). The reviewing and funding processes should also be online, easy, and quick; the online lender should offer a decision in less than a day. Typically, the online lender you choose should come with the following benefits:
- 24/7 availability
- Minimal documentation
- User convenience
- Quick disbursal
- Faster in terms of application and approval process
- Flexible loan amount and duration
The Takeaway
There are numerous online lenders, all of them claiming to offer the best services. For this reason, it might be challenging to choose a legitimate one to fit your financial needs. To avoid getting frustrated, it’s wise to consider the tips mentioned above before starting your loan application process.
