It is comforting to know that there have arisen many short-term loan companies that can help you get back on your feet again. The downside to this is that there are far more illegitimate loan companies than there are legitimate ones. Stories abound of people sending money to a loan company, only to find they don't receive their promised loan. Certainly, the last thing you want is to transact with a fraudulent loan company. Fortunately, the Internet makes it easy to confirm a business's legitimacy. Follow the steps below to get the straight-up facts on your loan company.
Check the address of the loan company. If the address has a "P.O. Box" address, instead of a street address, be on the alert. Furthermore, if you can't find the address online (such as on Google Maps), then that is another strike against the company's legitimacy.
Dial the phone number of the loan company. If you are taken to an automated touchtone system, and can't seem to reach any actual person, that is a bad sign, as a reputable company would have customer-service representatives available to answer customer questions. Of course, if the company doesn't list a phone number at all, that is a definite drawback.
Do a search on the company with the Better Business Bureau (BBB). This website only lists companies that are BBB-accredited, which means they adhere to good business practices. If your company doesn't come up, start searching for other loan companies.
Visit the Ripoff Report and Consumer Affairs websites and do a search on the loan company. These websites contain a database of complaints against companies that have turned out to be scams. By entering the name of the loan company, you will turn up any results that can give you an idea of its legitimacy, or lack thereof.
Be on your guard if the company asks for an upfront fee from you before it sends you a loan. This is a trademark move of many scams, especially if the fee amounts to several hundred dollars. No legitimate loan company asks for money before sending you an initial loan.
Be sure that you can find the loan company's interest rates for its loans. Be suspicious if the company does not list the interest rates. Furthermore, if the company charges a high application fee, as that is another hallmark of a scam.
Do a search on the company on Google. Searching on Google will bring up results containing anecdotal accounts of those who may have had bad experiences with the company. Put the title in quotes to generate the most accurate results.
Have an attorney read over the contract sent to you by the loan company, or on the loan company's website. The attorney will be able to detect if the contract's terms are clear and legal, thereby affirming to you that the company is legitimate.
Remember that if you speak with a representative from the company, and that person sounds insecure or uncertain, take that as a negative sign (especially if that person stammers when answering your questions). A legitimate loan company hires financial professionals who would sound sure of themselves and be able to thoroughly answer your questions. When it comes to loan companies, remember this adage: if it sounds too good to be true, it probably is.
Do not fall for a well-designed website, as many hackers are behind fraudulent loan companies and can use their talents to create a seemingly professional website.