Legitimate Online Loans: How to Find a Safe Lender
While there are plenty of legit online loan options, scammers also operate in the space. Because of the potential for fraud, it’s important to do your research and choose a legitimate loan from a reliable online lender.
How online cash loans work
Online loans — like Payday Loans, Installment Loans, and Lines of Credit — are typically offered by direct lenders. You’re able to complete an online application and receive your funds via direct deposit without ever visiting a physical location.
Once the money is deposited into your bank account, you can use it for a wide range of needs, from everyday expenses to emergency bills.
Types of legitimate online loans
If you’re on the lookout for legit online loans, there are plenty of options to choose from.
Personal loans
A personal loan is any type of loan where you use the funds for personal reasons. They can include small loans, like Cash Advances and credit-builder loans, or larger loans, such as Lines of Credit or student loans.
Payday Loans
Payday Loans are short-term, small-dollar loans that can give you a few hundred dollars to cover expenses before your next payday. You’ll typically repay this online loan in two to four weeks when you receive your next paycheck.
Installment Loans
With Installment Loans, you will receive a lump sum of money that you can repay in fixed monthly payments or installments. You’ll typically repay this type of online loan over a few months or years, depending on the loan terms.
Lines of Credit
A Line of Credit is a flexible loan that lets you withdraw funds as needed, up to your set credit limit. You can pay back this type of legit online loan all at once or over time, and you’ll only pay interest on the amount you borrow.
Auto loans
Thinking of financing a car anytime soon? You might consider pre-qualifying for an online auto loan before comparing the options offered by the dealership. In many cases, you could find better terms online or through your credit union.
Student loans
Student loans are one of the most common online loans on the market. You can use online student loans to pay for your tuition, as well as textbooks, housing, and other necessary expenses.
Credit-builder loans
As their name implies, credit-builder loans are online loans designed to help you build credit. You can often secure them through your local bank or credit union's website and use them to boost your credit score so that you can secure even more online loans in the future.
8 tips to check if an online loan is legitimate
While online loans are convenient and easily accessible, the process of getting one could pose some risks if you fall victim to an online scam.
1. Avoid an offer of advance payments
If a company guarantees they’ll give you a loan in exchange for upfront or “advance” fees, look elsewhere. This practice is illegal, and companies that require advance payments are usually scammers.
A legitimate online loan provider may charge an application or origination fee, but it will be clearly disclosed. This fee will also be subtracted from the amount you borrow and not tacked on in addition to it.
2. Search loan company reviews and licenses
Perhaps the easiest way to confirm whether an online lender is legit is to check their online reviews. Visit review sites like TrustPilot to get an idea of how previous customers feel about the lender.
| No. of reviews | Rating |
Advance America | 107,045 | 4.9 |
CashNetUSA | 35,942 | 4.7 |
Speedy Cash | 9,877 | 4.5 |
Ace Cash Express | 10,805 | 4.7 |
Source: Trustpilot, as of December 2024
In addition to comparing customer reviews, ensure you work with a lender that has all the proper licenses to operate in your state.
3. Check the loan company’s address
Although they offer online loans, legit lenders will have a physical address. In some cases, they may have multiple storefront locations near you.
If you receive an unsolicited loan offer, place the company’s address into Google Maps to make sure it’s real and not a fake filler. Scammers who offer online cash loans avoid physical addresses because they don’t want to be traced.
4. Search the loan company’s online presence
If a loan company catches your eye, check their website to ensure it's professional and free of typos. You can also review their social media accounts and any articles about them from news outlets. Legitimate lenders should have a solid online presence because that's largely how they reach potential customers.
5. Test their customer service
Legitimate online lenders pride themselves on high-quality customer service. If you’re unable to communicate directly with your lender or they have awful customer service, there’s a good chance they don’t offer legit online loans. Even if they do, do you really want to work with a lender that’s tough to reach?
6. Consider conflicting loan information
Legit online lenders should have their ducks in a row. If you’re getting mixed signals or conflicting information about your loan, either your lender has poor internal communication or they’re scamming you. Either way, you should avoid them and pursue a loan elsewhere.
7. Contact your state's attorney general
Your state’s attorney general works to inform the public of deceptive or unfair business practices, including loan scams. You can contact them online or by phone to see if they have any record of the loan company you’re considering. If they don’t, there’s a good chance the online lender is a scammer.
8. Understand that they won’t approve just anybody
While online lenders may have more flexible application requirements, they won’t approve just anyone for a loan. Even without a credit check, they’ll still review your financials, including employment status, bank statements, and outstanding debts, to ensure you can repay the loan.
Applying for a loan online vs. in person
Applying for a loan online or through an app could be faster and more convenient than visiting a lender in person. Online lenders typically offer fast approvals and funding, while traditional lenders may take weeks.
Advance America offers legitimate online loans
If you’re looking for fast, affordable, and legit online loans, consider Advance America. We’ve maintained a history of safe lending practices since 1997 and are committed to our customers. Fill out an encrypted online application now and get the funds you need safely and securely.
Apply now
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.
About the author
Jalin Coblentz has contributed to Advance America since 2023. His experiences as a parent, full-time traveler, and skilled tradesman give him fresh insight into every personal finance topic he explores.
