How To Guide
How to Protect Your Personal Data When Borrowing Money Online
Your data is a precious commodity that you need to protect, but sometimes, you need to share it, too. Like when you need to borrow money online. Your lender needs to see your financial information before they can approve or deny you a loan. Here are some tips to share this information safely that won’t put your personal information at risk.
Stick with Online Direct Lenders
The term “direct” here means the financial institution is the only one involved with your loan. A direct lender won’t partner with another organization to review applications, underwrite loans, or facilitate payments.
The alternative is dealing with a loan matching service that works on your behalf to find an online loan. These companies collect your information and shop it around to their network of lenders.
This tactic can be risky. You won’t know where they’re sending your financial data, so there’s no way to vet the lenders and their privacy policies before they get their hands on your information.
Limit How Many Applications You Fill Out
When it comes to online direct lenders, a lot of them provide fast and convenient applications right on their websites. It might only take you a few minutes to fill one out before you know if you qualify.
With that kind of speed, it may be tempting to fill out multiple applications to see which financial institution will give you the best deal. But you’ll want to rethink this strategy.
While legitimate online direct lenders will follow industry best practices to protect your data, the risk of a data breach is never zero. A targeted attack against their systems may overwhelm even the best cybersecurity.
With that in mind, it’s best to limit how often you share your information. Only ever fill out a quick application for loans online with one lender. Make sure you feel confident about their security after researching their privacy policies and rates.
Use a Strong Passphrase
Yes, you read that correctly — a passphrase and not a password.
Even the best password that follows all the rules is vulnerable to brute force attacks. Cyberthieves using the latest technology can bust the average password wide open in just six hours.
A passphrase is a lot harder to crack, according to the FBI. It contains a string of unrelated words that are statistically tough for computers to guess.
Here’s one as an example: el1giblegraphzippyvaluablesungl0ved
Once you’ve made one of your own, don’t reuse it for other accounts. The same rule about limiting exposure by applying with one lender applies here to your passphrase.
Use a VPN
A Virtual Private Network (VPN) shields your online activity by scrambling your data with sophisticated encryption before passing it through a remote server. This makes it almost impossible to track you online — whether you’re watching a geo-blocked video stream or applying for an online installment loan.
A VPN is especially vital if you don’t have a personal computer or Internet to apply and repay your loan online. A VPN will screen your browsing activity from anyone else using the same network, so a thief can’t snoop on your financial information or passphrases.
Borrowing online is safe if you take the right precautions to secure your personal information. Investigate VPNs, generate an uncrackable passphrase, and be careful when choosing between online direct lenders. These tips can keep all the personal info you share safe and sound.