How to Safeguard Your Data While Borrowing Online Loans

How to Safeguard Your Data While Borrowing Online Loans

Your personal information is on a need-to-know basis, so only legitimate financial institutions deserve a peek.

But how can you tell if you should trust an online loan lender with your confidential data? Making the wrong choice could expose your financial details to fraud.

You don’t need that kind of stress in an emergency. Luckily, the wrong lenders are a minority you can see a mile away.

Today, you’ll find out what to look for in online direct lenders, so you can concentrate on reaping the potential benefits of emergency online loans without any worries about digital safety. Here’s a checklist of what to look for in an online loan lender.

þ License

You would never see a dentist who doesn’t have their license and certification, so why would you borrow emergency loans from an accredited lender? In both cases, a license ensures they’re following the rules.

Financial institutions of all kinds must have a license to operate, including online direct lenders, credit service organizations, and credit access businesses. This license proves a financial institution follows the state and federal fair lending laws.

These laws are in place for a reason—they protect you from dishonest practices, excessive costs, and security risks.

It’s a glaring red flag when online lenders aren’t proud to show their licenses. It means they aren’t playing by the rules, so their emergency loans could be expensive or unsafe.

þ APR

APR stands for the Annual Percentage Rate of personal loans. It shows you the total cost of borrowing a particular financial product, including interest, finance charges, and other fees.

Online direct lenders must show the APR for all their emergency loans because it’s a better indication of how much this personal loan will cost compared to payment sizes.

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It’s also the law. According to the Truth in Trending Act (TILA), all lenders must share the APR of their products before you apply. This way, you can crunch the numbers and see if it’s the right option for your budget before you sign a contract.

APRs for personal loans can vary significantly depending on your credit score and lender. Some emergency loans for bad credit will have higher APRs than if you had perfect credit.

þ Privacy Policy

When it comes to data security, a company’s privacy policy is an important document. It shows what data online direct lenders collect, and how they store, share, and dispose of it.

This privacy policy is often boring legalese, but it’s an important read. It helps you understand how your data’s being used and whether you can optout of any information sharing.

A privacy policy is usually tucked away in a link at the bottom of their homepage. But you can always ask your lender to show you where you can find this information.

A comprehensive privacy policy will also share the security protocols in place to protect your data. This should include the following:

  • Valid Site Certificates to prove the web address actually belongs to the lender and not a scam artist
  • Secure Socket Layer to encrypt all data shared between your computer and the lender’s servers

Also read: What Are the Possible Sources of Hard Money Loans? 

Bottom Line

Online safety is a choice. You can avoid risky emergency loans by looking for a license, APR, and privacy policy. These essential features prove your lender plays by the rules. They’re in place to keep you safe, so make sure your next lender has them all.