Although you might be an empathetic listener or skilled carpenter, financial institutions don’t care about these details. When it comes to deciding whether they should lend you money, they want to know your personal financial information.
In the borrowing world, your personal information is the single most important thing about you. It lets financial institutions know about your past borrowing habits and your current earning abilities. These details help them determine if you can afford an instalment loan at the rates they provide.
Sharing your personal information online is a necessary step in the borrowing process. You can find quick and fast ways to borrow because of convenient applications that you can fill out rapidly, but it’s crucial you only fill out an application when you’re sure your info will be safe.
Luckily, there are ways you can share this data with your security in mind. From the steps you can take to increase your security to signs your lender will handle your data with care, here are some things to consider before borrowing money online.
Compare the Rates
Cybersecurity doesn’t trump financial security. They’re both equally important when you’re looking for an instalment loan online.
So, what makes an online loan safe for you financially? The answer is personal, as financial security means something different for everyone.
To find out what it means to you, you’ll need to understand your budget so that you know how much you can realistically afford to pay back on schedule. That way, you can tell if you can handle the rates and fees a financial institution applies.
Rates and fees can vary between lenders, so you must shop around to compare what they offer. Pay close attention to the Annual Percentage Rate (APR) when following this step, as it tells you a lot about how all the rates and fees affect your repayments.
You can see how the APR typically affects an instalment loan and what that means for your monthly payments. If you check to see how this compares to other options, you’ll have a better chance of finding something that fits.
Check to Ensure Your Lender is Licensed
Besides cost, you should also look for a license. This accreditation ensures your financial institution meets all the legal requirements to be a lender in your area. Many of these laws prevent usury, but they may also cover privacy laws that regulate how lenders handle your personal information.
It should be easy to find this information on a financial institution’s website. Many lenders wear it like a badge of honour, making it available under their About page or individual product pages.
A lender without a license is a lender that doesn’t play by the rules. There’s no way to confirm if they’re going to care about your cybersecurity, and they may provide questionable no-credit-check, quick cash advance loans.
Read Online Reviews
Reading the info posted on a financial institution’s official website provides you with a curated view of their products and services. If they’re a legitimate and licensed lender, you can trust the factual stats about their instalment loans.
But you can’t expect to get an insider’s perspective by checking their website. To get a wide-angle look at the way they conduct themselves, you’ll want to visit these third-party websites:
These are review websites that let verified customers share their experiences with online direct lenders. Their reviews give you an impartial look at how a lender’s loans work by divulging the good, the bad, and the ugly about a financial institution.
When reading reviews, you want to look for two things. An excellent average rating from a large data set. This means thousands of people have used these products before you, and the majority of these people found them helpful.
Review Privacy Policies
A privacy policy is a financial institution’s official statement on how they intend to collect, use, share, store, and discard your personal information — which makes it required reading. You can usually find a link to this information at the bottom of their homepage.
If you can’t find this information, consider it a red flag and move on to another financial institution.
Limit Your Exposure
One of the best ways to keep your personal information safe is by limiting how often you give it to financial institutions. After all, it’s impossible to have your data exposed if you never share it in the first place.
This rule is easy to follow. Only ever share your personal information with a lender you trust to handle your data with care.
In practice, this means applying with a legitimate lender one at a time. Rather than applying with all the banks and online direct lenders you can find and hoping you’ll get approved, compare your options to narrow in on one financial institution that provides the loans and security you need.
To improve your chances of approval on the first try, make sure you satisfy all the eligibility requirements.
Only Share Information Through a Lender’s Official Site or App
A legitimate lender will take the appropriate precautions to encrypt any information coming and going from their official website or app, so this is the only way you should share data at any step of the process.
If you receive an email from your lender requesting you send personal information in your reply, this is not your lender but a scam artist in disguise. The best fraudsters know how to make their phishing emails look like they’re coming from a legitimate source, but if you look carefully, you’ll see things don’t add up.
Always check the sender’s email address before you follow the instructions. While they might be able to copy the branding of your lender, they can’t use their domain name. To be extra safe, hover over any links they share to ensure they go to the right website.
If you’re ever unsure about an email, trust your instincts. Exit the email and contact your financial institution through the information they list on their website.
Use a Strong, Unique Password
Once you’re approved for an instalment loan online, you’ll set up a profile over the lender’s site or app. This profile is where you’ll manage your loan from here on out, including any time you want to review your balance, change your billing details, or make an additional payment.
This profile will contain a lot of personal information about your bank account and loan details, so you must keep it under lock and key.
- Password Dos: A strong password is at least 12 characters containing a mixture of upper- and lower-case letters, numbers, and special characters.
- Password Don’ts: You shouldn’t build a password around personal information that people can easily find on your Facebook page, so don’t use birthdays, pets’ names, or your favourite sports team.
The best password, however, is a passphrase. That’s according to the FBI.
A passphrase can be a quotation or series of easy-to-remember words that contain numbers and special characters. You’ll have an easier time remembering a quotation pulled from your favourite book, yet it will stump your hackers.
Here’s an example of how a passphrase is different from a password:
- Password: GoPacker$1982
- Passphrase: Life is what happens when you’re busy making other plans!
Bottom Line
Cybersecurity is essential when it comes to borrowing an instalment loan online, so don’t skip any of these steps. From your initial cost compared to the last character of your passphrase, each of these tips can help you safeguard your personal information so that only the right people see it.
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