You need to take a few simple precautions when applying for a personal loan. The first thing to ask a potential lender is whether his or her company is licensed in the state where you live. By law loan companies and brokers must be licensed in the state where they practice their trade.

Just because the company is licensed doesn't mean you will have a favorable experience with them, but it does mean that they are a legitimate lender.

Another precaution is to make sure any lender you are negotiating with provides you a list of fees to be charged. Fee disclosure should be done before you sign any loan papers. If the company does not disclose its fees in advance before asking you to sign loan papers, then its time to look for another loan company.

Just a few steps can go a long way to protect yourself and get a good lender instead of a problem one.