The Dangers of Getting a Wedding Loan Online

Wedding loans are typically short-term, high-interest debts. Due to the short time table to repay the debt, a wedding loan, like a number of personal loans, is considered high risk. This risk is even greater when the loan is sourced online. Online lenders are less likely to provide detailed answers to questions. You may even find there are many loan scams online. Watch out for these dangers when seeking a wedding loan online.

Loan Scams

Loan scams are more likely to occur online because a borrower will not be able to check out a lender in person. This makes it possible for a person or group of people to set up a fictitious lending operation in order to collect your personal information. They can then use your information to steal your identity, or they can even sell your information to other identity thieves. To protect against this, never submit personal information until you have researched a lender. Research the business name, address and website URL. You may even want to speak with a representative by phone in order to feel more comfortable with the lending process. 

Identity Theft

Even when you work with a reputable lender, identity theft is still possible whenever you share information over the Internet. For this reason, you should always use a private computer to enter any personal information. Never look for loans over a public computer or public Internet connection. When you do reach a lender's website, ensure that website is secure. Lenders will often have a badge on their site regarding the protections they have in place to secure the site. Wait to enter your personal information until you are directed to a personal page no other users will have access to. For example, never enter your Social Security number unless you are on your personal loan application page.

Nondisclosure of Terms

Since you are less likely to ask questions of an online lender, many online lenders will not disclose their terms in full when they quote your loan. It is illegal not to disclose all terms. To protect against this, some online lenders will offer disclosures in a way that makes them hard to read or understand. A traditional lender would go through each of these items with you personally. Online lenders know this will not be necessary, so they may intentionally make terms confusing in an attempt to mislead you. 

Predatory Loans

Misleading loans are not necessarily illegal, but predatory loans are. Predatory lending is hard to define. In general, it describes the practice of lending to an individual you have every reason to believe will eventually default on the loan. Even though this sounds like a bad idea, some lenders do this because they stand to make money through the default. For example, a wedding loan may be issued for $10,000. The loan may have 0 percent interest for one year and then skyrocket to a higher number. Few borrowers will default immediately on the loan. Instead, they will likely make payments for one to two years. The lender is likely to come out on top by making as many of these loans as possible even if a few default.

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