How to Spot a Legit Online Lender: A 10‑Point Checklist
Educational content only — not financial advice.
Before sharing sensitive information, confirm the lender is legitimate. Use the checklist below to reduce risk and avoid scams.
1) Confirm State Licensing
Legitimate lenders list license numbers and the states where they operate. Verify them with your state regulator. If a site claims national reach but offers no license details, treat that as a red flag.
2) Real Business Identity
Look for a physical mailing address, a working phone number, and operating hours. Cross‑check the legal name and any “doing business as” (DBA) names.
3) Transparent Pricing
You should see APR ranges, fees, and example repayment schedules before you apply. If costs are revealed only after you click “submit,” consider another provider.
4) Security and Privacy
Verify HTTPS and read the privacy policy for data collection and sharing practices. Avoid providers demanding unnecessary information at prequalification.
5) Soft vs. Hard Credit Checks
Good providers explain when each happens. Prequalification should be a soft check, with a hard inquiry only if you proceed.
6) No Pressure Tactics
Avoid countdown timers, urgent pop‑ups, or scare language. Responsible lenders allow time to read disclosures.
7) Clear Eligibility Criteria
Income, residency, and identification requirements should be posted. Hidden rules often lead to surprises later.
8) Review Patterns
Read a mix of reviews and look for consistent themes. Watch for repeated complaints about surprise fees or payment processing problems.
9) Reasonable Consent
Electronic signatures and ACH authorizations should be explicit, revocable, and explained in plain language.
10) Payoff and Prepayment Info
Know how to request a payoff quote and whether prepayment penalties apply. Clarity here signals a customer‑friendly provider.
Bottom Line
A few minutes of verification can prevent expensive mistakes. If something doesn’t add up, stop and confirm with your state regulator before you apply.