Very few traditional lending institutions accept borrowers with fair to bad credit rating. Even if they do, the interest rate is really high and collateral is needed. Therefore, a lot of new companies have started offering fast and easy loans online.
The best rated online lenders are transparent with their services and expose all loan-related information. This includes, but is not limited to, full disclosure of their online loan interest rates, how they are calculated as well as any other fees that may apply.
The only way you will know about scams is when someone else has already become a victim. One of the ways to ensure that the lender you choose provides loans according to the terms specified by your state is to check whether it is state-licensed. Once a lender is state-licensed, you can be sure that usury is out of the picture.
Another means is to check if a company tells you both the advantages and the disadvantages of the loans they offer. Companies that say only the plus sides are sugar coating and if you trust on their services, you will get a nasty surprise later on. It is a big plus if you can find a company that also provides tips on better money management. Such tips can come from an on-site blog or be relevant links pointing to more useful information.
Lastly, the loan firm you choose must grant the freedom of expression to their past customers. This means that feedback on their loans shall be allowed and with little control on the part of the company. Genuine feedback helps future clients learn from past experiences. It also sets their expectation of the service. Control should only be exercised to filter comments that are either too violent or those that promote competing online loan providers.
Hence, the implication is that the more useful information an online lender is offering, the better guided the consumers will be. Scams happen because of a lack in guidance and misleading information. Once the lending companies become more open, then more people will be attracted to their online loans.