Your digital security is critical anytime you hit the web, but it’s especially important when you plan on borrowing money online. You need to share confidential financial information with lenders before they can make a lending decision. If you choose the wrong lender, you can end up exposing your financial details to fraud.
Luckily, the wrong lenders belong to a tiny minority that gives the rest of the industry a bad name. You can borrow using the latest technology without worrying about your safety.
While there are no sure things, fraud is preventable when you team up with a lender that takes your security seriously. You can even consider an antivirus for data security. So, how can you borrow money online in a way that safeguards your data? Check out these tips below.
1. Always Read the Privacy Policy
Privacy or security policies outline how an online lender intends to collect, store, and use your data. Consider it a red flag if this information is missing, as it suggests this lender doesn’t play by the rules.
The Online Lenders Alliance (OLA) requires its members to share this information with you and to allow customers to opt-out of any information sharing.
According to “OLA”
“Protect every consumer’s personal data with comprehensive website security and privacy policy and ensure that your vendors protect consumer personal data in the same manner.”
What does comprehensive website security look like? Typically, you’ll want to see that the website has valid site certifications, and a secure socket layer to encrypt data shared between your computer and your lender’s servers.
2. Check for a License
Much like a doctor requires a license to practice medicine safely, a lender needs a license to offer responsible instalment loans. This license ensures a financial institution follows the state and federal fair lending laws that regulate loans.
These laws are put in place to protect you from usury, as well as unnecessary security risks. So, if your lender can’t produce a license in the state they operate in, it suggests they may not follow the rules. They could be offering services that put your identity and finances at risk.
For example Credibly is a solid service provider when it comes to small business loans. But before you go and sign up for Credibly, check FinImpact to see if that lender has a good rating.
3. Look out for Transparency
Don’t overlook how lenders advertise their instalment loans online. The language they use can tell you a lot about their priorities. If they only ever talk about monthly payment sizes, they could be trying to distract you from exorbitant interest rates and finance charges.
Your lender should be upfront about the true cost of borrowing. It’s the law. According to the “Truth in Lending Act” (TILA), all lenders must disclose the Annual Percentage Rate (APR) of their products before you apply.
Knowing the APR helps you make an informed decision about the true cost of the loan. Legitimate online lenders will breakdown the cost of their instalment loans on their website.
Borrowing money online isn’t inherently dangerous. Online loans are as safe as you make them. Avoid security traps by looking for a license, privacy policy, and transparent advertising. These three elements are features of a lender who cares about your online security.
