3 Reasons to Avoid Taking Out an International Online Loan

There are distinct advantages in doing business locally. That includes lending institutions.
People in need of a loan often start their search online, due to the vast selection of options available in the online loan market. There are even sites that will have you fill out one form and shop it to multiple lenders.
Unfortunately, the best interest rate doesn’t always mean you’re getting the best overall terms. Borrowers may be surprised by some of the complications and fees that can come up when borrowing from an international lender.
3 Good Reasons to Avoid International Loans
Competition is generally good for the consumer, but comparing domestic lenders to their international counterparts is difficult to do on an apples-to-apples basis. Here are three main areas of concern with choosing a lender from outside the United States.
International Lenders and The Truth in Lending Act (TILA)
The Truth in Lending Act (TILA), which is Regulation Z of the CFR, was enacted in 1968 to protect consumers from unscrupulous and fraudulent lending practices. According to the CFPB, the regulation applies to any lender doing business with US citizens, regardless of location.
On paper, TILA appears to protect you from fraudulent international lenders, but it lacks the teeth to enforce any real penalties in foreign countries. If your lender doesn’t have a physical location inside the United States, there’s nothing stopping them from continuing to operate.
The best way to protect yourself is to only do business with domestic lending institutions. You can find them online also, the rates and terms are competitive.
Notice: Information provided in this article is for informational purposes only. Consult your financial advisor about your financial circumstances.
Source: iQuanti, Inc.