How to Check If a Loan Company Is Legitimate

Concerned that the lender you may use is not a legitimate one? We comprehend. Lenders enquire about you and your company in great detail. That information could damage your credit score and cost you money in the hands of a con artist. And whether you’re dealing with company loans, personal loans, or even college loans, loan frauds are only increasing in frequency.

Fortunately, you may do some research before submitting a loan application or accepting a loan offer. By doing so, you’ll be able to tell if you’re working with a trustworthy lender or a con artist.

Therefore, make sure you apply with a legal loan firm by following these procedures before submitting your loan application.

Be on the lookout for warning signs

Even if everything has seemed good up to this stage, we strongly advise you to keep an eye out for warning signs while you complete your loan application. After all, it’s feasible for a scammer to approach you pretending to be a legal loan provider.

So be on the lookout for these red flags:

saying that those with weak credit can still acquire low interest rates. You can acquire business loans even if your credit is bad. However, low-interest business loans typically demand a stellar credit rating.
promising you a loan for your newly launched company. Reputable lenders have standards for minimum income and length of company.
requesting upfront payments when applying for a loan. Financial firms that are legitimate never impose upfront fees and never demand payment in gift cards.
However, hopefully you

. View its BBB rating.
You can also check the lender’s profile on the Better Business Bureau (BBB) website using the lender’s name and address.

business’s okay if the lender’s BBB profile indicates that business is not an accredited lender with the BBB. Accreditation really just implies you’re willing to pay the Better Business Bureau for a rating, as we explain in our guide to the BBB.

Instead, you should be on the lookout for things like recent government action alerts (as it’s not a good indicator when the government sues a lending company) or convincing consumer complaints about fraudulent conduct.

investigation online
The time to obtain a loan has almost come. Nevertheless, you might wish to perform a quick interest check on your lender beforehand. Finding litigation, scandals, swindles, and other information you might be interested in can be made easier with this.

Use these search terms, for instance, in Google

Fraud + [Lender]
Case plus [Lender]
Government action + [Lender]
  [Lender] +FTC
There are times when you can get pertinent articles by just searching for the lender’s name in Google’s “News” page.

To be honest, I hope you don’t discover anything. In such instance, you are prepared to begin your loan application, but wait until you have done so before lowering your guard.

If you don’t observe anything similar, that’s a really positive indication.

Check out company reviews
At this stage, you might want to check out genuine borrowers’ reviews of lenders.

Start by looking at the lender’s Better Business Bureau rating. Reviews, which are distinct from complaints, are frequently found on profiles. But if the ratings aren’t very favorable, don’t worry—financial institutions frequently receive negative reviews on the BBB website. Again, you’re mostly searching for indicators of phony lenders.

A lot of lender reviews can be found on Trustpilot, as well, we’ve discovered. In reality, Trustpilot has hundreds of borrower reviews for several of our top lenders. It’s possible that some newer lenders don’t have many reviews, but unless you want to be a test subject, we advise sticking with a lender that has at least a few dozen reviews.

Don’t forget to search for reviews from lending professionals, such as those you may discover on Business.org. Our lender reviews examine lenders in-depth and highlight any potential issues. So, we’ll be sure to let you know if we discover anything even somewhat suspicious about a lender.

search for the company’s registration
You should have more than enough information at this time to search for the lender in several databases. Use the lender’s address to determine the state in which it does business, then look up the secretary of state’s office website for that state. Search for the Utah secretary of state if, for example, your loan firm is based there. (Finding this should be simple on Google.)

You should be able to search for businesses by name on the website of the secretary of state. If the company is authentic, you should find a listing with loads of information, such as this:

ID for the business
current state (active or inactive, for example)
formation period
more states where the lender conducts business and more information

Look at the lender’s website.
Examining a lender’s website (and other online presence) is one of the first ways to identify loan scammers.

A trustworthy lender will have a website with a unique domain name. Consider [lender name]com instead of, say, [lender name].geocities.com or anything like.

You should also see a small padlock icon next to the website URL when you view it in your browser. If you click on the padlock, your browser ought to notify you that your connection is secure and allow you to check the security certificate for that website.

If there isn’t a lock icon or the security certificate has expired, the website isn’t adequately safeguarding your information. In the best case scenario, that suggests the lender unintentionally allowed its certificate to expire or experienced a cyberattack. At worst, it’s a con. In either case, avoid entering any personal data on that website.

Let’s just suppose that the domain name and padlock are attractive. Then, to make sure everything looks good, you might want to wander about the website a little. Is the website’s text, for instance, generally well-written? If there are several grammatical and spelling mistakes, it can be a hoax. (However, a few errors here and there don’t really matter.)

You can finally search for blogs. Whether the lender has a blog