Times are tough and more consumers are turning to personal loans to help make ends meet. However, there are many online loan sites out there ready to take your hard-earned money. Here are a few things to keep in mind before you agree to any loan.
- Approach all websites with a good degree of wariness. Be critical in general, and especially suspicious of any requests for personal information. Never fear that it is inappropriate to request more information from the specific website, about their business or their product, before submitting any information online.
- Never provide personal information, for example your identity number and banking details, to an unknown and untrusted entity online. Do not effect any payments in advance and be wary of free trails that require submitting your personal information.
- Engage in thorough research about the website, and the company behind it, prior to soliciting their services. Do not be satisfied by simply reading the reviews that are selectively posted on the website by the website administrators. Enlist search engines like ‘Google’ and peruse consumer complaint sites like ‘Hello Peter’ to obtain more information about the website or company.
- Always peruse the terms and conditions and the terms of service to search for the important clauses that set out the agreement between the parties. Study these sections and ensure that you are in complete agreement with them. Never tick some box to agree to terms and conditions that you have not read or do not completely understand.
- Do not judge the legitimacy and honesty of a website and the services it offers based on window dressing, in other words based on how professional the site appears.
- Peruse the company’s contact details to establish whether they have their own company email address, or whether they simply use generic email addresses, like Gmail. Use of the latter is usually a bad sign. Also, note whether the website is secure by checking in the upper left corner of your screen, where the web address is entered. If the website’s name is preceded by HTTPS, it usually suggests a more secure website.
- If the company is a credit provider, they are required by law to be registered as such in terms of the National Credit Act [No. 34 of 2005]. This registration, and the associated protection it provides, can be verified by the Office of the National Credit Regulator.
- Two axioms hold especially true, and should always be kept in mind in this context: ‘Don’t judge a book by its cover’, and ‘If it looks too good to be true, it probably is’.
Written by: Stephen van der Merwe - Senior Attorney, Law Clinic