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How To Verify That A Loan Company Is Legitimate

A business loan is a great option if you are looking to expand your business. If your credit score is not in the best shape, there might not be many lenders that you can choose from.

Why you should verify a payday loan company

There are many scammers out there who will take advantage of desperate business owners, even though bad credit loans are available. It is therefore important to be able to determine if a loan company you are considering to work with is legitimate. 

Tips to help you identify potential red flags

There are many ways to verify that a loan company is legitimate. 

  •     Check out the BBB website for information about the loan company. 
  •     Next, do a quick internet search and check out customer reviews. 
  •     Finally, make sure to check with your attorney general that the lender has been registered with the appropriate state agencies.

These steps will help you avoid falling for a scam before you submit a loan application to a lender. Ensure to check out which legitimate loan companies you might be eligible to borrow from. Sign up for a free account at Oak Park Financial to receive personalized loan matches. It won’t affect your credit score.

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Ask yourself if you have ever heard of the payday loan company before you accept a loan for bad credit. You can do an internet search for company names if you don’t know the name. Even though it may be relatively new, the company should have a profile on sites like Owler or Crunchbase and perhaps even customer reviews.

You’ll probably be safer ignoring their offer if you don’t find any information or worse.  You may even realize that the company is a scam.

Should I trust all companies with websites?

Online presence doesn’t mean the company’s operations aren’t predatory, even if it has one. To find out more about the lender, visit the Better Business Bureau website. A letter grade ranging from A+ up to F will typically be displayed along with the reasons.
You may also be able to read reviews from customers, which will give you an idea of what you can expect. You can use the website to search for a lender that is a better fit if you feel the lender is not right for you.

Know what your needs are before applying

Some lenders may only be interested in making profits.  As a result, you might feel that the contact you have with the company has been too aggressive or manipulative.

This could be an indication that they are trying to confuse you and make it seem like you must make a decision before all facts are available. If you are feeling uncomfortable with the process, you can take a step back to examine why and decide if you should go on with the contract.

Where can I get additional information?

If everything appears to be in order, but you still want to confirm this, contact the attorney general of your state. Lenders and loan brokers must register with state agencies in order to do business. If the attorney general does not have a record of your company, you should run the opposite direction.

Additional tips

You should not only follow the steps above, but also consider other things when determining a loan company’s legitimacy. These are some questions and answers that will help you.

Are loan companies asking for money upfront?

To process your loan, some lenders may charge an origination fee. This fee is usually deducted from the loan disbursement. You will not be asked to pay this fee by any legitimate lender before you have access to your money.

Are loan companies allowed to access your bank account?

After your application has been approved, the lender may ask you for your bank information. This is to determine where to send the funds. It is not common for banks to request your login information for online banking to verify your account. This could be a scammer trying to access your account to withdraw or transfer funds to theirs.

How can I spot personal loan fraud?

While some personal lenders may allow you to use personal loans to fund or start a business, there are many scams. To determine if the loan offer is fraudulent, you can follow the same steps you would for a business lender.

Are bad credit loans legitimate?

Many business lenders are licensed to work with people with poor credit. It is important to compare bad credit lenders carefully to ensure you don’t fall for scams and maximize your chances of getting a loan.

The bottom line

Knowing how to verify that a loan company is legitimate will help you avoid losing money and possibly your business. These tips will help you find the right lender for you.

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