Evaluating Personal Loan Companies

Before you make any purchase, it’s smart to learn about the company with which you plan to do business. It’s natural to want to know more about how they do business and if you can expect the extended warranty they offer to be valid when you need it down the road. Evaluating personal loan companies should be no different because the nature of your relationship with the lender will shape your overall satisfaction with your loan for as long as you have it.

Evaluate the company website

No, not every business has the most engaging use of technical effects to keep you searching its website for hours on end. What personal loan companies should have is a website free of typos and grammatical errors. One or two errors isn’t the end of the world, but pages plagued by them may signal a predatory website built in a hurry to capitalize on an economic downturn.

Make sure you scroll all the way to the bottom of the pages. What do you see? Most legitimate companies have a privacy policy, contact information, terms of use and the like. Failure to provide one of these links is not a warning sign in and of itself, but keyword stuffing should send you running. This is when a company identifies the keywords most searched in their industry and repeats them over and over in hopes of gaining search engine traffic. Search engines are onto this practice, but not all webmasters know it doesn’t work yet. If you find this at the bottom of a personal loan company site, continue your lending search with a different company.

Investigate local businesses

Every town has that one location that changes hands every month or so. One day it might be a pizza parlor and the next it’s a payday advance company or drycleaners. It happens. New businesses fail, but you should pay attention to ownership. Is the same person cleaning your clothes one week now joining the ranks of personal loan companies? It could be a personal dream becoming a reality for the owner, but it may signal a business owner looking for something profitable at any cost, regardless of whether he has experience in the industry.

Even established lenders may not have exceptional service records. Although you want a company with staying power, you don’t want to use a lender that employs unfair or unethical business practices. Checking with the Attorney General in your state or the Better Business Bureau can let you know if other consumers have issues with this business. Finding negative information may not influence your decision to use a lender, but it will give you pause for thought before you sign your personal loan agreement.

Above all, remember that evaluating personal loan companies is about more than comparing interest rates and terms. If your research into the company turns up a number of red flags, that low interest rate they offer can prove to be a sour deal.

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