How to Borrow Money Effectively Online

Online lending platforms have become almost as popular as banks and credit card companies, if not more. There are currently more than 100 such platforms that operate throughout the world and most offer their services through their website or smartphone apps.

Generally speaking, online lending services have more operational freedom than banks and this allows them to offer certain advantages that traditional lenders cannot. For example, lending platforms often do not perform credit rating checks, enabling individuals and companies with poor credit ratings to borrow money. Furthermore, they do not report their activity to credit agencies, which means that some loans are not recorded in the permanent financial files of the borrowers.

This having been said, as popular as online lending platforms may be, borrowing money from them can also be more dangerous than getting financing from a bank. These platforms are not regulated as strictly as traditional lenders, and this gives them the freedom to offer terms and conditions that can be very dangerous to the borrower. Luckily, spotting online lending scams is relatively easy, provided that you know where to look:

Check a Third-party Review Website

Keep in mind that app reviews can be manipulated on any webstore, making it seem that a platform is safe to use. However, there are certain third-party websites such as TrustPilot that do not modify the reviews in any way. Visit one or more of these sites before installing the app and establish if the app itself is safe to use. The reviews will usually contain information regarding what permissions are required to install the app and what information they collect once they are on your phone.

A Simple Google Search Can Uncover Important Information

Do not underestimate how much information you can obtain through a simple Google search. Look up the app as well as the company that owns it and determine if either of them has a history of scamming people. Also, look for the location of the headquarters of the parent company and then type the address into Google to see if it leads you back to the company.

This step should help you establish if an app is a fake designed to collect user data or if it is the real deal.

Always Read the User Agreement When Creating Your App/Website Account

Always read the user agreement before starting to use the app. It should contain information regarding what kind of data the app collects, where is it stored and how it will be used. Pay attention to every paragraph that talks about whether or not your personal information will be sent to third parties for marketing purposes.

Read the Terms and Conditions of the Loan Thoroughly

As with bank loans, never agree to something unless you’re perfectly sure that it is safe. Read the terms and conditions for borrowing money and pay special attention to what could happen if a borrower were unable to repay the money on time. Some platforms have been known to access the phone book of the device that the app has been installed on and call random contacts in an attempt to force the borrower to repay the money faster.

In other cases, certain charges may be hidden away behind special clauses or the platform may reserve the right to change the terms and conditions after the loan has been given.

Lastly, never download a money-lending app from unofficial sources. Even if the name of the app and the identity of its parent company are in order, apps from unofficial sources can be modified to serve malicious purposes such as collecting sensitive financial data.

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