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Senior finance tips: The dos and don'ts of applying for credit online

Feb 27, 2012, 6 a.m.

Applying for credit online is easy, fast and stress-free. It also can be fraught with security problems. Here are some "do's" and "don'ts" you should remember when you seek senior financial services online.

Do protect yourself, at all costs, from identity theft. This tip cannot be overstated. Regardless of the online transaction, protecting your sensitive information, e.g., Social Security number, is the most important "do" of all. Be sure that websites you use offer the highest level of security.

Do use loan calculators, particularly when applying for a loan like an auto loan. Online loan calculators can give you a relevant estimate of your cost to borrow and expected monthly payments for the car you want. Many will even factor in manufacturer or dealer incentives, such as cash back or very low interest rates.

Don't use so-called "quick" online loans, if possible. If you need a small loan (under $2,000) in a hurry, shop diligently to find the best terms. This senior finance option can be very costly. These products are targeted to senior finance "lightweights," most of whom simply do not understand how to handle budgets, money or loans.

Don't request more money than you need or can repay on time. This is not merely a senior finance or online tip. Asking for more money than you need will cost you more in interest or possibly disqualify you, particularly if a computer is generating the decision electronically based on the values you enter.

Do have a specific, worthwhile purpose for an online loan. Do-it-yourself senior financial services demand that you have a strong and reasonable purpose for applying. Ask yourself meaningful questions BEFORE you apply. Why do I need this loan? For practical things like home repairs, or for material things, like a new car? What is my income and how will I be paying back this loan? You get the idea.

Do plan on serious online shopping if your finance plan includes a new home mortgage. Use your computer to search trusted mortgage lenders for the best terms, not just interest rates. Without a live loan officer in front of you, becoming comfortable with a mortgage lender requires more research and due diligence.

It should be obvious that these "do" and "don't" tips are rooted in common sense; not sophisticated online or computer talent. You need not become an expert in senior financial services to find the best loan deals available, but you should have a smart, safe and secure strategy in place to protect yourself.

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