How to Determine if a Lender is Legitimate


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Written by: Josh McFadden | Best Company Editorial Team

Last Updated: February 24th, 2020

You may have heard the saying: "Money is the root of all evil." Arguments could be made in favor or in opposition of that assertion. But one undeniable thing is that people need money to survive, and we'd all like to have more of it.

These needs and desires can often lead people to resort to questionable tactics to acquire it. Some people engage in criminal, even violent, activities in order to accumulate more wealth.

In the business world, it's unfortunately not uncommon to hear about financially unethical behavior such as scams, embezzlement or fraud. And when it comes to managing your money and putting in in the right places, you want to be unmistakably sure that you are partnering with an ethical, honest business.

Choosing the right lender is a process everyone should take seriously. It's essential to work with someone you trust implicitly and one you know has your best interests at heart. Your lender should be up-front and truthful and should never be misleading.

In addition, there are potentially lenders who may not have unethical or dishonest intentions but simply might not have the reputation, skill, experience or service you need to take care of you and your money. After all, with a lender, you are entrusting a significant amount of time, money and energy to your future and security. You have to make a wise choice.


So with all the options available for choosing lenders and financial institutions, how can you be certain you find the one that best suits you? There are a few simple steps to follow. Do these-instead of randomly picking-and will enjoy a positive experience applying for, securing and benefitting from your loan.

1- Use Expert and User Reviews from Utilize the countless reviews found in our personal loan section to determine for yourself whether or not a company is legitimate. Our reviews for each company are broken down into aspects of their business that are both good and bad. At the end of the expert review, we provide a recommendation if it is deemed worthy. This is an excellent resource to determine whether or not a company is worth doing business with.

To read about the best personal loan companies, view our top recommended suggestions.

2- Conduct a BBB search. The Better Business Bureau is a nonprofit organization that informs the public of companies' trustworthiness and reputability. The organization rates businesses and accredits many. Ratings are given in grade form-F being the lowest, or failure, and A+ being the highest. A business does not have to be accredited to be rated, and accredited businesses don't necessarily garner high marks.
The BBB provides free reviews of more than 4 million businesses. The reviews detail what the business does, where it is headquartered, who makes up key leadership, and issues and complaints against the company.

As you research different lenders, go the BBB website at, type in the lender and read what the BBB has to say. If the assigned grade is low and there have been customer complaints against the business, you might want to think twice about choosing it. The BBB is a tremendous resource for assessing reputability, professionalism, and public perception.

3- Google it. It sounds simple, but typing in the name of the lender or business in a Google search should yield a slew of different review sites. Depending on how large or established the institution is, you could instantly have at your disposal numerous customer and industry reviews of the lender. You'll read what experiences others have had, how fairly they were treated and how knowledgeable the lender was.

4- Ask around. Talk to your family members, neighbors, friends, co-workers and others about the lender or lenders you are considering. See what they link about thee prospective partners. Of course, different people will have had different experiences and opinions, but you can usually get a nice idea about what you'll get yourself into by talking to people.

It doesn't take long to conduct some research and do some digging to determine whether the lender is right for you. Many lenders are similar in terms of experience, skill and services offered, so often, the choice can simply be a matter of convenience or personality. But to avoid the pitfalls of financial disaster, take some time and educate yourself.

The Top Personal Loans Companies

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#1 Best Egg chevron_right
9.3 Overall Score
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#2 FreedomPlus chevron_right
7.0 Overall Score
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#3 SoFi chevron_right
6.8 Overall Score

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