The recent advancements in terms of fintech have led to the development of a large number of online lending platforms. These have had a slow start; however, they are currently the main competitors of banks and other private lenders such as credit unions. An increasing number of individuals have even given up on the services of banks altogether and are currently only borrowing money through these services.
This shift in behaviour has several reasons, the most important of which is the fact that most online lending platforms do not perform credit rating checks when deciding if an individual is eligible or not for a loan. In addition to this, these online services are often easier to use than the ones offered by banks because the borrower is not required to physically submit any documents and everything is done solely over the internet. Generally speaking, online lending platforms are safe to use, however, some websites use somewhat shady methods to convince individuals to borrow more money than then need or to agree to dangerous terms and conditions.
Choosing a Safe Online Lender
There are hundreds of online lenders to choose from and each is free to design his offers however he sees fit. This means that not lenders have the borrower’s best interests in mind. This having been said, look for platforms that are as popular as possible. These have thousands of active users which mean that if anything goes wrong, there will be someone to signal it to the others. Another useful practice is to go to a third-party review website, such as TrustPilot and to see if other users have found the platform safe. Lastly, only use platform whose addresses begin with “HTTPS”. This will ensure that your connection to the website is safe and that nobody else has access to the data that you send.
How to Analyse the Deals That They Offer
As a safety measure, never use your main bank account when borrowing money from an online platform. Instead, consider opening a new one and using it as a buffer between the lending platforms and your main account. This will ensure that if the lending platforms ever want to charge you without your knowledge, they will not have access to the entirety of your funds.
What Dangers to Take Into Consideration?
There are two important elements that borrowers should always keep in mind when using online lending services:
- The Platform May Withdraw Repayment Money Automatically –Most platforms will automatically start withdrawing repayments from the borrower’s account. This form of automation is useful in most cases, however, it may cause issues if the account is empty or if you need all the money that it contains;
- Some Platforms May Sell Personal Data –Certain platforms tailor their agreements so that they gain the right to sell the user’s personal information if he does not repay the money on time;
These details will always be contained within the terms and conditions of the platform. Make sure to read them thoroughly and to only use lending platforms that you trust.