Top tips when applying for a personal loan online

Like so many things, the process of applying for a loan has begun to happen increasingly online. Indeed some loan markets, like PayDay loans, now operate almost exclusively online meaning that without access to the Internet and a savvy knowledge of how this world works, you could leave yourself at a disadvantage. This new world has, however, brought with it some new risks to the consumer and at Choice Loans we see many people making elementary mistakes that not result in them not getting a loan but actually damage their chances in the future. Here are some top tips to bear in mind when getting a personal loan online:

1. There is no free money: If you've been declined for a loan by a bank or credit union, do not think that the Internet offers a 'Promised Land' of freely available credit. Though many websites would like to suggest this with their casual marketing and implications of easy approval the reality is that Lenders are not so easily swayed and if you have adverse credit you are unlikely to be able to get a loan unless you offer your home as security. If you're a Tenant then let me tell you the truth that not many websites will say: unless you have a very good credit record you will not get an unsecured loan (try a Guarantor loan to rebuild your credit if you must). You are better off taking time to look at your Credit Report and try to understand why you have been declined. See what it is that may be hurting your credit rating and how to improve in our Blog post here
2. There is no easy ride: It amazes us here at Choice Loans how many people call in for a loan and expect it to be wired to their bank account while they talk with us on the phone. Honestly, grow up! Let's apply some common sense here: would you lend money to a complete stranger just based on a phone call and the 'promise' that they will pay you back? No, of course not. So don't expect a professional lender to do it either. Yes, you will need to complete a form and yes, you will have to send in identity documents and proof of income
3. Check that the site you are on is a reputable Broker or Lender:Sadly there are many less than reputable sites out there preying on the vulnerable masses who are desperate to get a loan. The vast majority are not Lenders, not even accredited brokers rather just "Lead generators" who pass their data to a third party or, more likely, MANY third parties resulting in you getting spammed for weeks with calls and emails about selling gold, getting payday loans, joining a debt management plan etc. So how can you know the site you're on is reputable? Well here are a few checks to make:
   • If they're a broker or Lead Generator, that's ok but under the terms of the Consumer Credit Act the must say this clearly on their site. Not sure what role the fulfil? Move on.
   • Anyone collecting Consumer loan enquiries must have a Consumer Credit Licence and this must be published on their site. Check the footer or the Contact Us page to find it. Not there? Move on. If it is there, you can search the Office of Fair Trading database for details about them and to ensure their license is valid and up to date.
   • Similarly anyone processing personal data must be registered with the Information Commissioner's Office under the Data Protection Act. Their license number must also be on their site and you can check it here https://ico.org.uk/
   • Lastly if they are a limited company then under the Companies Act 2006 they are required to have their Company name and number on their site to. Can't see it? Best be careful and move on.
4. Check the Privacy Policy: I know it's a bore and everyone usually ticks the box for Terms & Condition as a matter of course but when applying for a loan it's important to know who will see your application. The risk is that your data is spread to all and sundry, they all do credit checks on you and you are left with no loan and a weakened credit file. If the site you apply on intends to pass your data to third parties they will say so. That's not always a problem but be careful if this means these third party sites also have the right to conduct a credit search in you
5. Do NOT apply at multiple sites: There are a finite numer of Lenders in this country and most brokers wil have access to them all so don't apply on 10 different sites expecting a different result each time. This will only result in multiple searches on your credit file and damage to your record.
6. Above all DO NOT PAY AN UPFRONT FEE: We did a test recently and applied at a website for a £2,500 loan using a fake name and fake address. The result was several calls, texts and emails saying we have been guaranteed a loan if we just paid a £50-£120 fee upfront. This is complete lies but sadly many members of the public will believe it because they want to believe it. The reality is that they will pay the money and then never hear from this company again. We know this because they then come to us asking for a loan and telling us their tales of woe. Just don't ever pay an upfront fee

The reality too is that unless you have very good credit, you're not going to get an unsecured loan. If you have adverse credit then you will either need a Guarantor (if you're a tenant) or you will need to offer your home as security if you are a homeowner. Or if you want to discuss your situation in confidence without any credit checks or your details being passed anywhere else, give us a call. Our number is 01494 410125 and we're here from 9am to 6pm