There is a lot of mistrust in the banking industry. This comes form many different things such as memories of a few banks collapsing in the past, worry about fraud and concerns about not being able to repay loans and the costs of that. It is important to make sure that you are confident in your lender as if you are stressed about them it does not make for a very positive borrowing experience. However, you may be surprised about what you should look into to find out if they can be trusted.
Ask people you know
The best recommendation that you can get is form people that you know. If they have had experience of using a particular lender then they will be able to tell you about it and you will be able to decide whether you feel that they will suit you. People you know tend to have your best interests at heart and they will have no reason for being biased. Therefore, they will be honest when giving you help or advise and this will help you to decide whether a particular lender might be worth considering or worth avoiding. The more people you can ask the more likely you are to find a good lender that you will be able to use. You may feel a bit shy of asking people about lenders, but most people borrow money in their lifetime and it can be a really useful thing to do so there is no need to feel embarrassed about doing it. Many people would not be in the wealthy position they are if it wasn’t for the fact that they were able to borrow money, people such as home owners, for example mainly will use a mortgage to get into that position.
Look at their website
A good thing to do is to take a look at the lender’s website. You can find out a lot of information about them form there. If there is not much information on the website then you may feel like you do not trust them, but most should have something useful. You should be able to find information about the lender and contact details should you have questions that you would like answering. You should also be able to find out about the products they offer. You will get a feeling for the company form the website and this should help you to decide if you trust them as well. Contacting them can be wise, even if you have no specific questions as it will let you know how good they are at responding to queries and you will be able to get a feel for how polite they are, how quick they are and things like that.
Find out about their history
If you search for them generally online you might be able to find general information about them. Things like new stories or factual information on personal finance sites could be interesting for you. Try to use trusted sources as this will mean that you will be able to be sure that the information is more likely to be correct. If they are fairly new then this could be more difficult, but looking on personal finance sites and forums could help you to be able to find out more information.
Ignore if they are well-known
It can be really tempting to just go for a company that is well-known but this can actually be a mistake. You might think this is odd, but there are interesting reasons. Often, we have heard of a lender but we do not know why. We see the fact that we have heard of them as a positive thing and feel more likely to trust them. This also applies to advertising, where we might feel that we trust companies that we see adverts for. This is because we might have the view that if they are well-known it means they have a reputation and so have to be good in order to keep that, but actually the opposite could be true. If they are well-known they will get business base don that and do not need a good reputation to get business. This means that it could actually be the companies that need a good reputation – those that are less well-known that can be trusted more.
So, it can take quite a bit of research in order to find out which of the online lenders can be trusted. It is worth it though. If you take out a loan and are unsure about the lender then you may have a more stressful borrowing experience. However, if you feel that you can trust the lender, you will be happy to use them and feel like you will have a better experience and will be able to relax. It is therefore important to your experience and worth doing.