Online banking has been around for years, but nowadays you are also able to find a number of good online lenders to choose from. Online loans are changing the way that we borrow money as you no longer need to fill out the same old forms with your bank.
So, how do you get a loan online and what is the process.
The Benefits of Borrowing Online
Online lenders aim to make borrowing a lot easier and there are a number of benefits when you choose to borrow money through an online lender.
Online lenders have the ability to pretty much almost tell you immediately whether you have been approved or not.
Traditional banks are different, even if you are able to fill out an online application, you may need to wait a while to find out if you have been approved as someone will need to review the application and then you may still have to visit the branch in person.
Online loans takes this away as the whole process is conducted online and you are able to submit any supporting documents through their system, which makes the approval process a lot quicker.
You should always shop around for a loan and you will find that online lenders will usually charge less than anywhere else. With online lenders, you will usually find lower interest rates and smaller service fees. This is because online only lenders do not carry the same overheads that banks carry with physical branches.
It is a lot easier to get a loan when you have good credit, but if you are still building credit or if you are suffering with bad credit, then you might find joy with an online lender. You may find that online lenders are more willing to approve you even if you have a lower credit score as they will rather assess your ability to pay the loan back and use information like your income and utility payments, for instance
This then means that approval can be granted to those with low or even bad credit.
The majority of online loans are unsecured, which means you are not required to pledge collateral in order to get approved. If you fail to repay an unsecured loan, then your credit score will drop, but you don’t risk any assets being repossessed.
Wait…keep reading to find out more about borrowing online…
How to Borrow Online
Getting an online loan is not that much different to the traditional way of getting a loan, but the whole process feels a lot easier and you don’t have to leave your home in order to apply.
With online borrowing, you will need to provide personal information like your ID number and address as well as financial information like your income.
All you need to do is find a reputable online lender and then start the application. These applications can take between 5 and 15 minutes and once you have been approved, you can receive your loan in a matter of hours in some cases.
What About Payday Loans?
When you are looking for online loans, you will get plenty of hits for loans that are payday loans. Payday loans are short term loans that carry a high interest rate. These type of loans can work for you, but they can also work against you.
The idea of a payday loan is to help customers that are in a financial bind and need money quick. The loan is then repaid once you receive your next pay check, which can cause problems for that month. If you do decide to take a payday loan then you need to make sure that you can afford it.
Payday Loans can be recognised in a number of ways.
Firstly the term for the loan is very short in that you have a month to pay the loan back. Rather find a loan where you have months to pay off the debt.
Secondly, the interest rate on payday loans is high. You will need to shop around for the best interest rates and find one that suits you.
Thirdly, payday loans will advertise that they don’t check your credit, but the fact is that you will need to have decent credit to get a decent loan.
Lastly, online lenders that ask for up-front payments should be avoided. Legitimate lenders may charge fees, but these fees will generally come from your loan proceeds.
Payday loans do have a purpose and can help in times of an emergency, but they should be treated with caution.
If you are looking for a loan then you will need to shop around and the great thing about online lenders is that you have the ability to compare loan offers easily. Online loans are a great option and the application and approval is easier and quicker, which means you will be able to get the money you need quickly.