Worried About Online Lending Safety Here's How To Protect Yourself
                     W O  R R I E D A B O  U T  
O  N L I N E L E N D I N G
S A F E T Y ? H E R E ' S H O  W  
T O P R O  T E C  T Y O  U R S E L F
B Y L E V E L F I N A N C  I N 
G

Not too long ago, applying for a loan was everything 
but  a quick and smooth process. Steps like visiting a 
bank,  talking with loan officers, and filling in loads of  
paperwork were unavoidable. After that, you had to  
wait several days (if not weeks) before knowing if the  
application had been accepted.
Then, came the time of telephone banking and the 
first  internet credit providers. These innovations sped 
up  things considerably.
In addition to not visiting the bank and speeding up 
the  process, online lending has numerous other 
benefits.
It has a lower application rejection rate 
than  traditional banks.
Lower overhead costs for the lender often 
translate  into lower interest rates or fees for the 
borrower.
It’s more likely to find online lenders specializing in
specific types of loans, meaning their services 
cater  to the needs of particular customers.
However, many still have concerns about online lending 
safety.  They ask themselves whether these credit providers 
are as  reliable as traditional banks. The following article 
focuses on  this topic and provides valuable tips to improve 
your safety  when applying for a loan online.
The first thing to consider is that online lenders must abide by 
 the same rules as traditional banks. A lender must follow both 
 federal and state regulations to be considered legit. Any loan  
provider operating outside of such rules should be seen as  
unreliable not because it operates online but because it 
doesn’t  comply with current laws.
Make sure your loan provider doesn’t violate the 
following  restrictions.
A lender (or financial institution in general) must avoid 
unsafe  and unsound practices under the Federal Deposit 
Insurance  (FDI) Act.
Usury laws impose a cap on the interest rate that lenders 
can  charge.
There are caps on the total amount of credit that can be  
extended to a single borrower (or group of related 
borrowers).  Current rules impose limitations on the amount 
of money a  financial institution can lend to its affiliates.
There are limitations on loans that can be extended to 
insiders.
When applying for an online loan, you need to share  
confidential information in order for the credit provider to  
decide whether to approve the loan or not. Such 
information  includes:
proof of your identity (e.g., ID card, passport, or 
driving  license)
proof of your address (e.g., utility bills or 
bank  statements)
proof of your current income (e.g., paychecks or 
tax  returns).
Your lender may also request additional financial 
information,  such as:
your monthly rent
your monthly mortgage 
payment  your credit score
the value of your collateral.
Many borrowers worry that communicating this information  
online exposes them to data stealing or fraud. While the risk of 
 this happening is incredibly low, there are various steps you 
can  take to safeguard your data.
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