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:
1. Privacy
2. Design
3. Popularity and Reputation
4. The Short Form
5. Communication
6. 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:
a) 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?
b) 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.
c) 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:
a) Is it a fast-loading site, or are you waiting forever?
b) Is it straightforward or elusive? Can you glean important, direct information from the homepage, or does the site appear to coax you in deeper?
c) 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 everything. However, just like in the real world, it is important to gather information on these two key points, and use them as a gauge.
a) 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 or smaller institution, might not be frequently visited, but still be a perfectly viable choice. So, review popularity alongside rock-solid common sense.
b) 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.
c) 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.
a) 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?
b) 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?
c) 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.
a) 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?
b) 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?
c) 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
a) Obtain several offers from competing lenders, and compare the nuts and bolts.
b) Who offers you the best savings? Who seems just too low to believe? Who is way too high to consider?
c) 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.
Publisher's Directions: This article may be freely distributed so long as the copyright, author's information, disclaimer, and an active link (where possible) are included.
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.
Copyright 2005, by LoanResources.Org, This article is available in full format at: Evaluating Online Lenders. Tom Levine provides a solid, common sense approach to solving problems and answering questions relating to consumer loan products. His website seeks to provide free online resources for the consumer, including rate-watch, tips and articles, financial communication, news, and links to products and services.