Categorized | Finance

Guide on Finding a Legit Lender for Small Personal Loans

A personal loan is the sum of money borrowed by an individual from a lender for personal use. The loan money can be used for any purpose like a vacation or home renovation. There are many lenders who offer personal loans. Some reputed banks lend loans as do some small private lending companies. As a general rule, the lending companies will require a good credit history and collateral to cover the cost of the loan. These secured personal loans will have a relatively lesser interest rate than the unsecured loans but the amount of the loan will be in proportion to the collateral produced to the lender. Another form of loans is quick cash loans. Quick cash loans come at a quite high interest rate. But they are available in less than a day and are convenient. If the borrower has a poor or less than average credit history, getting a loan from a reputed bank becomes very difficult.

There are many other private lending companies and lesser known banks offering personal loans. But the difficulty is in finding a reputable source for small personal loans. There are many stories of people who sent some form of processing fees or other fees to these illegitimate companies only to never hear from the company again. There are few steps to follow to ensure the lender for any personal loan or a quick cash loan is legit and the deal is good. Generally the companies will deduct the processing fee and other such fees from the sanctioned loan amount. If the lender asks for money before giving a loan, it is better to be wary. Most states have their own consumer affairs website where complaints are recorded. A borrower can check those sites to see if the company he is dealing with is featured there.
To be safe, it is also a good idea to go over the contract letter given by the lender with an attorney. The borrower should realize what interest rate is quoted, the repayment frequency, repayment installment, penalty for early closure or pre payment, etc., before signing the contract and getting the money. It is better to do the contract in person where ever possible. It is not feasible when processing a loan through an online website. In such cases, the borrower should check the address of the company on search engines to know if such company exists. Every state will have a list of recognized and legitimate lending companies and banks. It is better to check if the company is listed there.