Before clicking on that online loan center advertisement toting the lowest rates, read these cautionary tales. The FTC recently sued several online loan centers for violating federal laws, and without proper research, you could be a victim.
The lenders allegedly lied about how much their loans would cost, required borrowers to allow the lenders to take money from their bank accounts automatically, and threatened to sue the borrowers or have them arrested for non payment. While this is not the case for all online loan centers, there are some precautions you should take when shopping for online loans. Do not let advertisements for cheap online loans swindle you out of any of your hard earned money.
First, when shopping for cheap loans online, shop for the credit offer with the lowest cost. Try to find out the annual percentage rate (APR) and the finance charge of different options before you select a credit offer. If you can not find the lowest APR on an online loan center, than go into the credit unions.
Making a realistic budget, including your monthly and daily expenditures, is also crucial when selecting an online loan center. A savings plan will help you to avoid having to borrow unnecessary money that you could have saved.
Finally, Find out if you have overdraft protection on your checking account. If you are using most or all the funds in your account regularly and you make a mistake in your account records, overdraft protection can help protect you from further credit problems.
Proper planning and research can save you from being the victim of a loan scam, so do not necessarily jump on the first online loan center that boasts the lowest rates. If it seems too good to be true, it likely is. While there are some reputable online loan centers out there, be sure to do your research before committing to anything, or giving anyone access to your bank account. You will be glad you did.