In the Net: Safety Concerns about Online Lending

The boom of internet in today’s technology has paved-way to a lot of online services that would otherwise be so much of a hassle to undertake. Name it, and every cumbersome process now has an online counterpart: passport servicing, request for authenticated personal documents, job applications, banking, and even personal loan application and processing. With the boom in technology, however, comes a valid point of concern: how safe are online transactions, and for the purpose of this article, how safe is online lending especially in the Philippines?

Generally, it is safe, as long as you know where to look. The safety of online lending, as it is for any other online transaction, actually lies in your hands. Even before hitting that apply button in the website you are in, make sure to be wary of at least three things:

1. Reputation. The thing about anything online is that they are easy to build, propagate and proliferate. An ill-intending individual or group may easily come-up with a site that intends to steal information, if not actual money. When considering online lending in the Philippines, make sure that the website of the online lending company you would want to engage has more than just the actual application page. Check out the About Us page, see if it has an established history in doing the business it claims it does, and look for the office address and contact numbers. Moreover, a quick search about the lending company through a search engine such as Google may generate results that would give you in-depth knowledge about the company and even reviews from its previous clients.
2. Terms of Service. This might come as a hassle for most as the point of applying for loan online is to cut the red tape, but actually reading through the terms of service and agreement is of extreme importance specially when dealing with just anything financial. In doing so, one will know how personal information will be handled by the lending company and if it complies to pertinent Philippine legislation such as the Data Privacy Act and Truth in Lending Act. If such Terms of Service is vague, or worse, missing, there should be a room for doubt as to the legitimacy of the online lending service facility.
3. Requirements. An authentic online lending service in the Philippines would require documents to prove identity and address and would conduct character investigation, usually through a phone call. Typical requirements include at least two government-issued IDs, proof of billing, certificate of employment and pay slips. While anything beyond the aforementioned may actually depend on the discretion of the lending company, asking for any amount from the loan applicant should never be among the requirements. If there are any processing fees, it is usually deducted from the loan proceeds and never asked from the loan applicant prior to actual processing. If an online lending service facility or any of its agents asks you to deposit a certain amount to a bank account or asks for bank accounts and PINs, then by all means, decline.

While this list is non-exhaustive, it basically covers the most important things you need to be on the lookout for when applying for an online loan. As a general rule, online lending from legitimate sources especially in the Philippines is safe; just do not fall into the hands of those who intend to deceive.