6 Key Points to Evaluate Online Lenders
by Tom Levine
Published on this site: April 5th, 2005 - See
more articles from this month...
The internet is teeming with lenders who are vying for your
business. It seems like everyone wants to loan you money.
You are truly in the driver's seat by going online for your
mortgage, refinance, and consolidation needs. But how do you
select a lender? How do you choose the right institution?
How do you know who to trust?
In this brief article, we will cover the 6 simple, practical,
and essential key points that we feel you should evaluate,
when exploring online lenders: Feel free to print this out,
and use it as a free guide, while pointing and clicking your
way to success:
- Privacy
- Design
- Popularity and Reputation
- The Short Form
- Communication
- Points, Fees, Terms and Rates
1. Privacy:
In the modern world of ecommerce, it is essential that
all respectable businesses honor your right to privacy:
- Check for a posted PRIVACY POLICY, prominently displayed
on the homepage of your prospective lenders site. Read it.
Does it make sense to you? Does it address how they will
use your email address, your name, and your private information?
- Do they ask for things that may seem unreasonable at
this stage of the game? Be wary of requests for credit card
numbers, social security numbers, and similar information
that may not be appropriate early on, for example, when
you are filling out the initial, short form. Naturally,
your lender will need that information down the road, but
certainly not right out of the gate, when initiating the
first steps towards a relationship with you.
- Is the lender a member of a posted, third party, privacy
program? For example, TRUSTe is one such independent company
that will designate a member site. You can look for their
emblem, and similar third-party companies. This is not a
requirement for securing a good privacy policy; however,
it is worth noting.
2. Design:
The storefront of the online world, is the website. Therefore,
it is important that you examine the sites design, and evaluate
it, much the same way that you evaluate an office or store
as you walk in the front door. Let me give you a couple things
to consider:
- Is it a fast-loading site, or are you waiting forever?
- Is it straightforward or elusive? Can you glean important,
direct information from the homepage, or does the site appear
to coax you in deeper?
- Are you inundated with pop-ups, pop-unders, and other
in-your-face ads, or does the site seem helpful?
Remember, how the lender presents themselves online, is a
reflection of their business philosophy, and it tells you
a lot about what kind of lender they may be, after you sign
on the bottom line.
3. Popularity and Reputation
I'm sure you learned in high-school, that popularity and
reputation aren't verything. However, just like in the real
world, it is important to gather information on these two
key points, and use them as a gauge.
- By typing your lenders URL into http://www.alexa.com,
you will be able to ascertain how popular your lenders site
is, because Alexa will tell you how much visitor traffic
the site gets. This isn't a science, and popularity isn't
everything. For example, an extremely popular website could
treat you like a number, and a relatively new lender orsmaller
institution, might not be frequently visited, but still
be a perfectly viable choice. So, review popularity alongside
rock-solid common sense.
- Say, why not check out your prospective lenders reputation,
by going to the online Better Business Bureau, http://bbbonline.com
and checking the Reliability Report? This report will provide
you with corporate information (such as name, address, phone
number), BBB membership information, whether or not the
lender is a participant of the "BBB Online" program,
along with a complaint history, and each complaints final
resolution.
- These aren't the only methods for gauging popularity
and reputation, of course. You can talk to people, go to
chatrooms, conduct search-engine research, etc. Again, popularity
and reputation aren't everything, but keep them in mind
while exploring lenders, both online and in the real world
of course.
4. The Short Form
The Short form is a term used to describe the basic application
that you initially fill out, when seeking a loan from a lender
or institution.
- Is it short indeed? Does it ask you for basic information,
relevant information, and is it presented in a simple and
concise fashion, perhaps no longer then 1 to 2 pages?
- Is the short form organized and appropriate? Does it
make sense, is it simple to fill out, and is it easy to
understand, and appropriate for an initial application?
- Consider this form as an introduction to your lenders
style. If the form is simple, concise, and easy to fill
out, this may tell you a lot about the lender. On the other
hand, if the form is complex, difficult, and requesting
a little more information than your comfortable providing,
this too might spell out a word of caution, and provide
important information about your prospective lender.
5. Communication
Never underestimate the importance of communication. How
the lender chooses to communicate with you from the get go,
might indicate choices the lender will make later on in the
process.
- Does the lender have an "about us" page, and
do they provide meaningful information about their business,
such as how long they've been around, where they are located,
their phone number, their physical address, and perhaps
even their corporate structure? Or, are they a ghost in
the machine, providing little to no information about themselves?
- You will ultimately be speaking with a live person on
the phone. How do they strike you? Are they pleasant, cordial,
and polite? Are they low-key, helpful, and respectful? Or,
do you see signs of pushiness, or over marketing?
- Never make an immediate decision. Talk to 3 or 4 lenders,
and then give yourself a pause to reflect on who provided
the best deal, and, who might be the easiest and most appropriate
to work with.
6. Points, Fees, Terms and Rates
- Obtain several offers from competing lenders, and compare
the nuts and bolts.
- Who offers you the best savings? Who seems just too low
to believe? Who is way too high to consider?
- Check out the current interest rates, and make some market
comparisons. Our site has a free RateWatch updated frequently
throughout the day, or, you can easily find this information
at any search engine or at other reputable websites online.
We've enjoyed providing this information to you, and we wish
you the best of luck in your pursuits. Remember to always
seek out good advice from those you trust, and never turn
your back on your own common sense.
Disclaimer: Statements and opinions expressed in the
articles, reviews and other materials herein are those of
the authors. While every care has been taken in the compilation
of this information and every attempt made to present up-to-date
and accurate information, we cannot guarantee that inaccuracies
will not occur. The author will not be held responsible for
any claim, loss, damage or inconvenience caused as a result
of any information within these pages or any information accessed
through this site.
Tom Levine provides a common sense approach to solving
problems and questions relating to consumer finance. Calculators,
free articles, daily rate-watch, financial news updates, and
much more, at http://www.loanresources.org/
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