Nobody likes falling short on money but they do happen. While you try your best to stick to your budget and maximize your savings, there are circumstances you cannot avoid – like emergencies. You need to act fast and it’s a good thing you can have a quick and accessible source of cash in a pinch.
A quick cash loan online is one attractive option. You don’t have to wait for a couple of days or weeks to get your borrowed amount. Before the sun goes down, you can get hold of the money.
Three Ways Online Lending Is Different From Traditional Lending
An online lender is different from the bank you’ve been transacting with for years. The new generation of lenders tries to redefine the way you borrow money. They aim to make borrowing fast and hassle-free for consumers.
- Easier approval
If you don’t have a great credit and you’re still working on your credit file, online lenders won’t deny your loan application promptly. Unlike banks and credit unions with strict requirements, online lenders accept borrowers with lower credit scores. They still check but they use an alternative information to evaluate one’s creditworthiness.
- Quicker process
Unlike traditional banking, you don’t have to visit a branch and wait for weeks for a bank loan officer to review and approve your application.
The process of borrowing online is faster, easier, and more straightforward – online lenders can tell you right away whether or not you’re approved for the loan. They will also let you know how much you can borrow and what your payments will look like.
- Unsecured debt
Most online loans are not secured against your assets. It means you don’t have to promise a collateral to get approved, making them a safer choice for some. If you fail to repay the debt, some legal actions will be taken but they don’t involve repossessing an asset.
How To Borrow Money Online
Search and shop around
Once you put “online loan” in the search box, you’d encounter a number of promising lending companies with flashy headlines. Though their offers look similar, they still vary slightly so it pays to shop around until you find the right one. There’ll always be a loan provider that treats you better than the other in terms of rates, terms, and customer service.
Compare, compare, compare
Aside from the allowable amount, there are other crucial factors to consider: term of the loan, interest rates, and the process of checking creditworthiness.
- Avoid loans that have very strict and short terms. Instead, try to look for loans where you can make monthly payments over several years and pay off early without prepayment penalties.
- Don’t settle for loans with very high interest rates or fees. Short-term online loans are considered as a high-interest debt but you can always find some lenders who charge substantially less. Doing so will save you from an expensive debt spiral.
- Don’t rejoice when they refuse to check your credit history. Yes they are likely to approve borrowers with lower credits but no reputable company grants money to a borrower without checking his background. If they do, they’re taking a risk, expecting to be compensated for it. Or worse, they are scams.
- Check the calculator. Most websites will have online calculators to present you with an amount to repay including the initial charge to take out the money as well as the interest rate.
Provide relevant information
You’ll be asked about the amount you need to borrow as well as the purpose of your credit. Information such as social security number, address, and mobile phone number should also be provided. Other lenders might require employment and financial details including information about your job status, income, and expenses. The process should take about 10 to 15 minutes.
Watch out for advance payment scams
Stay away from online lenders who demand payment up-front. There’s a chance that they’re “advance payment” scammers asking you to hand over cash and providing you nothing in return. Nothing is wrong with being skeptical when it comes to making online transactions.
Do you really need to take out a loan today?
Here’s a friendly reminder before you go: Online loans, like payday loans, should be your last resort. It may sound ironic that this piece is all about how to get an online loan and I’m now suggesting not to.
They are fast and convenient alright, but take note that borrowing small amounts of money can be very expensive. It’s safer to seek other options like borrowing from family and friends, asking an advance from your employer, or borrowing from your trusted bank or credit union.
Ina Salva Cruz is one of the daytime writers for Speedy Money Payday Loans, an Australian-based business, providing short-term borrowing solutions. Like other young adults, she’s focused on getting a head start on her finances.