How to know a loans website is safe to use

Consumers apply for loans on the Internet these days as the first port of call. The days of going to the bank teller or phoning up a loans company are definitely behind us and so the presence of online lenders has become mainstream. However, it is not always easy to determine which sites are safe to use online and which are not.

We have to be very careful when providing our personal details including our addresses, phone numbers and bank details to ensure it does not get into the wrong hands. We provide some tips to help you decipher a safe site from amongst the crowd.

A safe and secure website is defined as:

  • A legitimate online lender with a license to practice
  • Will treat your details carefully and confidentially
  • Will not pass on your information to numerous third parties without permission
  • Offers affordable rates and is not usurious

Has it been recommended online?

Usually Google is the first port of call for applying for an online finance product, after all, most of our customers find us by typing in ‘guarantor loans’ or ‘compare guarantor loans.’ Whilst Google is a reliable source, you have to remember that it is based on a search algorithm and the sites at the top of the rankings are usually the ones with the best marketing budgets and not necessarily the best companies.

If you are using comparison websites or have seen first-hand recommendations from the likes of Money Advice Service, Money Saving Expert or Citizens Advice, you know that you are being recommended to a lender who is safe, secure and likely has the best rates.

The use of comparison websites at least allows you to see several different lenders in one place, allowing you to make the best decision on who to use. If the comparison websites include further information such as consumer credit and FCA registration then it certainly shows a level of trust and security.

Has it been recommended elsewhere?

If you have been recommended an online loans company through a friend or family member who has had a good experience, then naturally this will suggest it is safe. Equally, seeking third party reviews from companies such as Trustpilot, and Feefo and seeing that people have had good interactions with the lender is another good trust signal. It will also tell you if the product or service is bad and not worth pursuing. Also be sure to check the date of those reviews since the more recent, the better.


Other online channels such as social media can be useful. Whether you post into forums or consumer groups and ask for advice. On that note, it can be worth checking the social media of that specific online lender. If they are posting recently and regularly, it suggests that they are a legitimate company – as sites that do not function or have real people behind them, typically do not post regularly on facebook and twitter and they hide behind the scenes.

Is the site secure?

A good way to check that your information is held safely is if the site is located on a secure server, known as an https. This comes up in the browser tab on your mobile, desktop or tablet and the site’s URL simply starts with https and there is usually a secure symbol next to the site.

This puts the site on a secure server which means that the information you enter is encrypted and harder to access or ‘hack’ from external sources. This is essential for any website where you enter your personal details.


Do they have an FCA license?

All loan providers, comparison sites and brokers must have an FCA license in order to provide or introduce loans in the UK – including short term loans, guarantor loans, peer to peer loans, logbook loans, personal loans, credit cards and more.

To become FCA authorised is a rigorous process and investment by the website. It ensures that all procedures have been taken to ensure the safety of the customer, the transparency of products offered and that the people running the website and company are fit and proper to do so. FCA authorisation is available to anyone but only granted to those deemed responsible – so this is very important. FCA registration numbers are usually located on the footer of every page of the website and it is worth cross-checking the numbers on the FCA register here.

Are they a direct lender or broker?

In the world of online lending, websites typically fall under direct lenders or brokers. A direct lender means that you are the applying only with that lender and they will be responsible for processing your details, any further checks, funding your loan and any collections.

This is different to a broker, such as a comparison site or a lead gen company who may disguise themselves as a lender. If they do not show a comparison table, is common to see one loan application form but as a broker, your information may be sent to numerous companies looking to offer you a loan. You may be successful with a broker and improve your chances of being funded, but you also must be aware that you may receive multiple offers and phone calls from different companies.

Other website features

Other website queues to look out for when applying online include:

Having a real phone number: Companies with a real, UK based phone number are more likely to be legitimate. In fact, it could be worth calling up the number first and asking some basic questions. By comparison, a site without any phone numbers could be based abroad and therefore could put your information at risk.

Having a local address: It is good to see that the lender you are applying with is based in the same country (UK). This can be cross-checked on the FCA register. Whilst some loan providers may have headquarters in Malta or Gibraltar, you ideally want to apply with someone locally.

Site is too cartoony: Loan websites that have graphics that are too cartoony may not be taking your application seriously. Those companies that resemble tech companies or financial institutions may be better suited for your financial requirements.

What information they ask for: Loan companies ask questions in their application forms and this is very standard. You need to think twice before providing information that is too personal i.e mother’s maiden name. However, it is common to provide your bank details as this is where funds are deposited to if you are successful – just make sure that the site has an http secure server.

There are very few companies online that still ask you to pay a subscription or membership fee to be eligible for a loan. This is common for sites where you can check your credit score. But, for a loan company this is not normal and something you should avoid.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.