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Wednesday, December 7th
Personal loans can be an effective tool to help finance the cost of emergency car repair or a home improvement project. It can also be an effective tool to help you consolidate debt. These days, there is a good chance that you will submit a loan application online as opposed to actually visiting a bank, credit union or other financial institution. Let's take a closer look at what you can do to protect your privacy and safety while submitting your own personal loan application through a lender's online portal.
Learn More About a Lender's Security and Privacy Policies
One of the easiest ways to protect yourself while applying for a loan online is to educate yourself about a lender's security and privacy policies. Ideally, the application page meets industry encryption standards to ensure that your information cannot be seen while it is being processed. When data is properly encrypted, it will look like nothing more than a series of random letters and symbols to anyone who sees it being transferred from your computer's network to the lender's network.
Typically, lenders will only retain personally identifying information for a short period of time. This is typically done to make it easier to apply for future loans or for the purposes of complying with state or federal records laws. It is important to know that information about your loan may be stored indefinitely and sold to outside parties.
It may be possible to limit the amount of information that is shared with other parties, but that will largely depend on applicable privacy laws and a lender's policy. Ultimately, if you don't feel comfortable with who will see or handle your application or personal data, it may be in your best interest to work with another lender.
Make Sure That Your Own Network Is Secure
Even if your lender adheres to security and privacy best practices, those efforts will mean nothing if you're on a network that isn't properly secured. They will also mean nothing if you use a compromised computer, tablet or smartphone to submit a loan application.
This is because a device that is infected with malware may be vulnerable to hackers who can see everything that you're doing on your device in real-time. If a hacker has installed a keystroke reader on your computer, he or she can see everything that you type on a loan form. Within minutes, that person can gain access to all the data needed to submit phony applications in your name.
Prior to starting the loan application process, it may be a good idea to run an antivirus or antimalware scan on your computer or smartphone. Signs that a device may be infected include the appearance of random pop-up ads and reduced processing speed.
Don't Be Afraid to Ask Questions Before Submitting an Application
If you have any questions about the loan application process, you should speak with a customer service representative prior to submitting it. In most cases, this can be done by calling the customer service number listed on the application or on the lender's website. Alternatively, you may be able to start a live chat with someone who can answer your questions or address any concerns that you might have.
Stay Vigilant After Your Application Has Been Received
After your application is submitted, you will likely receive an email confirming that the lender has received it. The email may also contain information regarding how long it will take to make a loan decision and what will happen after such a decision has been made.
In some cases, a loan decision will be made within minutes after your request for financing has been received. However, some lenders will take up to 10 business days to determine if you are worthy of obtaining a loan. In such a scenario, you'll typically get a letter in the mail letting you know whether your application was approved or denied.
If you are approved for a loan, the letter will have details about your account and any next steps that you need to take to close the deal. If your request is denied, it will state the reasons for your denial and what you can do to learn more about how your information was used to come to that decision.
There is a chance that you might receive an email or phone call from someone claiming to represent the lender that you sent a loan request to. While the letter or call may be from a legitimate source, it's never a good idea to provide personal information through email or over the phone unless you initiate contact with the lender. In the event that someone contacts you claiming to need more information about the loan, call the lender's customer service number to verify why the information is needed and how to submit it securely.
What Else Can You Do to Safeguard Your Information?
When done properly, the process of applying for an online personal loan is a safe, convenient and easy one. However, there are additional steps that you can take to put your mind at ease even if you don't have any specific reason to think that you are vulnerable to financial fraud.
With a few taps on your screen or clicks of your mouse, you can place a fraud alert on your credit report. Typically, you only have to alert one of the major credit bureaus that you think that something might be wrong. After receiving this notification, the alert will be passed on to the other major credit agencies.
Once it has been placed on your file, it will be good for a full year. While the alert is active, creditors must contact you directly by phone before any credit accounts can be opened in your name.
You can choose to provide an additional layer of protection by instituting a full credit freeze. When you freeze your credit report, new accounts cannot be opened even if you provide direct authorization to do so. Furthermore, most parties will be barred from even conducting a hard pull of your credit report. Unlike a fraud alert, a full freeze does not expire until you revoke it, and you must typically contact each credit agency individually to put one in place.
The Benefits of Online Loan Applications Generally Outweigh the Risks
Applying for a personal loan online offers a number of potential benefits such as the ability to apply at night, on weekends or on holidays. Furthermore, you can usually apply using any device that has access to an internet connection. Finally, you may be able to send your application to multiple lenders at once if you use a broker as opposed to applying through a specific financial institution.
You should also consider the fact that you can save your application as you go, which can be ideal if you need to stop what you're doing and finish it later. Many lenders and brokers allow you to track the progress of your application through an online dashboard. This can make it easier to spot any issues that might arise while they are still easy to fix in a timely manner.
If you are looking to apply for a personal loan, it's generally in your best interest to do so online. Many lenders and brokers have stringent security measures in place to make sure that your personal information isn't seen or used in an inappropriate manner. You can feel free to contact a lender directly if you have any questions about the loan process itself.
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