In need of a financial boost? Or maybe you’re looking to purchase a big ticket item but don’t have the cash upfront? Whatever the case is, obtaining a personal loan can be a great way to resolve the issue. Personal loans can range in size from a few hundred dollars to several thousand and can assist you in making big purchases, getting out of debt, or paying down some bills. Though it is a great way to temporarily finance your needs or wants, it is important to do your due diligence.

Not All Lenders are the Same

It is not good practice to start carelessly putting out applications for loans without having done your due diligence. In other words, you need to do your research. You’re going to be providing a company with your personal information including your social security number, address, phone number, place of employment and banking information. Supplying this information to the wrong person could put you at extreme risk for identity theft – or worse.

Another reason that you need to learn what you can about loans and the lenders is to ensure that you’re going to be working with an organization that will provide you with reasonable rates and quality services. By doing careful research and a little comparison shopping, you can secure a loan that benefits you and doesn’t do further damage to your finances.

Due Diligence – Things to Do Before Applying for a Loan

Before you fill out any loan applications, you’ll need to do the following to learn more about loans and the lending provider. Below is a list of things to do:

  • Check the Better Business Bureau – To determine if a loan company is legitimate, you want to start by doing a brief search at the Better Business Bureau’s website. There you can find more information on the company including a list of previous complaints or issues the customers may have had.
  • Check the company website – When looking to apply for a loan, review the company’s website. Look for clues such as contact information – do they provide you with a physical address and working telephone number to contact them? When was the last time the information was updated on the site? Does the site look professional done or thrown together?
  • Check Review Sites – There are loan review sites that you can check out to learn more about a particular service provider. You can see a side by side view of various lenders and read reviews from previous customers.
  • Beware of ScamsScams are very common when it comes to loans. To ensure that you’re not being conned or tricked into providing sensitive information that can later be used against you, you’ll want to pay attention to a few warning signs such as:
    • Upfront costs – you should never agree to give a lender funds upfront to secure the loan. This is usually a scam to get your banking information and a few bucks out of you.
    • Little Info – a lending provider that only wants a small amount of information from you is looking to scam you (in most cases). Since being approved for a loan requires things like a decent credit score and a stable income, if you go to fill out an application and it only requires your bank account information, you should be weary.
    • Compare Providers – In order to get the best deals on a loan, it is also a good idea to compare the services of at least three lenders. Review their websites to see what the eligibility requirements are, who has the best loan offer, lowest interest rates, and flexible repayment options.

As with any type of purchase you make, not all things are created equally. In order to ensure that you’ve secured a loan through a legitimate service provider that is also going to provide you with the best rate, you’ll need to do your due diligence. You don’t want to put your personal information in the wrong hands, or spend more money than you have to on paying it back. While it may seem like a lot of steps to take to get the funds you need, in the end, it is totally worth it.