Choosing the best loan company from a list of options can be intimidating and challenging. There is a near-endless variety of factors to consider, and any decision you make could end up costing you more than it should. To help you navigate this confusing process, we have compiled a list of tips that will significantly increase your chance of finding the best online loan companies for your needs. Here is a beginner’s guide to choosing the best online loan companies.
- Shop Around. There are many small companies with similar rates to larger ones, so don’t assume that you have to choose one of the big guys just because they are everywhere. Most of the larger companies offer many of the same services as smaller ones do, and they make it easy to find out what you’ll need to provide in terms of personal information. Shopping around is a crucial step that too few people take seriously. The interest rates among loan providers can differ hugely, even if they’re based right next to each other.
- Fine Print and Disclosures. Some companies make it hard for you to understand all their terms and conditions (legally, this is called ‘fine print’). Sometimes this is done with good intentions; they don’t want you to get into trouble or miss out on something important that could save you money. Sometimes it is done with bad intentions; they want to sneak in some terms that are not very consumer-friendly.
- Rating. Check the Company’s Better Business Bureau and other ratings they might have, such as those from TopTenReviews.com or TrustPilot.com. If you are not familiar with these sites, do a quick search for them and learn how to use them before applying for a loan. Very few companies have ratings lower than a four.
- Don’t Trust Everything You Read Online. If the testimonials look too good to be true, they might be fake or misleading. The same goes for pretty much everything else that promises significant results with no effort on your part. You will never find a company where everyone is happy with the service, but if the complaints seem genuine and numerous, that’s probably a sign that you would be better off going elsewhere.
- Customer Service. All loan companies operate in basically the same way. It is unlikely that one will be vastly superior to another at this task, primarily if they’re all working online. If you have any queries or concerns, contact them before applying, not after. If they are silent or unhelpful, it’s probably best to look for another option. However, ensure you carefully review their customer service policies, repayment terms, and loan requirements before applying for a loan.
- Credit Score. If your credit score is below 600, avoid lenders requiring a minimum FICO score. This includes most installment lenders, payday lenders, and cash advance companies. A few installment loan companies will accept customers with a credit score of less than 550, but you will generally pay high rates and fees. If your credit score is high enough, shop around for lenders that offer the lowest interest rates on loans with direct deposit. Many companies are now offering special deals if you choose this payment option, making it easier to repay your loan early and save money on interest.
- Price matching. If there are specific terms that you cannot accept (such as prepayment penalties), consider price matching. Most providers will offer to match their competitors’ rates if you ask them about it. There are no hard and fast rules in this regard. However, it is usually best to make sure you can give them back at least two months’ worth of fees if you cancel your loan.
- Give Feedback. Do not be afraid to let your lenders know if something is wrong with their service or that of one of their representatives. If something seems off, it’s best to bring it up as soon as possible. The longer you wait, the less likely they’ll be to do anything about it.
These tips will help you find a loan company and get a better deal than if you tried to go at it alone. Remember to look for ways to lower your interest rates and fees. Whether it’s by bundling services or using another type of collateral to secure your loan, there are usually methods available to those who are persistent enough to look for them. Please see your top options at SFGate.com if you are looking for an online loan company.