Loan applicants must be mindful of data security
The rise of online alternative lending has been a good thing for today's consumers. More opportunities exist for individuals to receive financing when they need it the most, and when traditional lenders may not offer it. As such, Morgan Stanley projects P2P lending will reach a $290 billion value by 2020. But certain issues, most notably security, must be taken into account by borrowers looking for loans online.
"Online lending could be worth up to $290 billion by 2020."
Let's closely examine some key cybersecurity concerns web-based borrowers should keep in mind:
Look for fraudulent application detection
According to American Banker, fraudulent online loan applications have become a major problem for the industry: Scam artists use tools like automated algorithms to create multiple forms using personal and financial information stolen from unsuspecting Americans.
Consumers should only deal with alternative lenders with appropriate fraud countermeasures, including fraudulent application detection. ITProPortal recommended global shared intelligence solutions that pinpoint legitimate and illegitimate uses of a borrower's personal information.
Be careful with multiple devices
The news provider noted that it's also wise for prospective borrowers not to use multiple devices when applying for loans. More points of account access means extra opportunities for unauthorized entry. If planning to use a tablet and laptop, for example, ensure that your lender is aware of both devices and will flag anything suspicious during the application process.
Applying for several different loans in quick succession isn't unheard of, but creditors find it suspicious because "stacking" like this is a frequent tactic of fraudsters. Space out your applications to avoid raising red flags among potential lenders.