With the advent and subsequent growth of the world wide web, it was only a matter of time before lenders cashed in on convenience by introducing online loans. We would be forgiven for thinking that this was a mere addition to various ways one can procure a loan, but online loans are much more than that. By their very nature, online loans can be both applied for and granted much more quickly than traditional loans.
There is no scheduling and rescheduling of meetings, and no awkward and extensive interview process to sit through. Instead, there is just a simple credit check and a decision that follows.
Since it is speed and convenience that define online loans, it is perhaps understandable that they are most commonly of the short-term and personal variety. For this reason, they are often associated with payday loans – a type of loan that is designed to provide borrowers with immediate access to funds. Online loans are typically unsecured – meaning that there is no collateral involved – and while online payday loans usually amount to less than $1,500, an online personal loan can significantly exceed that.
“By their very nature, online loans can be both applied for and granted much more quickly than traditional loans.”
The typical features of an online loan:
- Applied for over the internet, usually through the website of the lender.
- Can be obtained from the comfort of your home and with less hassle.
- Designed to cover short-term, small expenses.
- Can take the form of personal, payday or bad credit loans.
How do I apply for an online loan?
As mentioned above, the application process for an online loan is much less hazardous than applying for a traditional loan. It is typically managed entirely on the lender’s website, where selecting your options is made easy through a user interface that determines how much a loan will cost. Once the borrower has decided on the length of the loan and how many installments will be made, a formal can be made. Understanding that convenience is everything and that most people seek out an online loan for immediate access to funds, quick lenders can provide an approval decision in a matter of minutes.
The typical benefits/drawbacks of an online loan:
- Obviously, the main benefit to online loans is that they are quick and easy to apply for, with the borrower avoiding the lengthy and often arduous application process that might be associated with your traditional personal loan.
- They are designed to solve short-term financial issues. If a borrower requires emergency cash to cover medical bills or tuition fees, for example, an online loan will be able to provide that without much hassle.
- Online loans are some of the most riskiest and expensive loan options available to the average consumer, with excessive APR and short-term due dates that make it increasingly difficult to meet demands.
- Indeed, many question whether online loans, which often take the form of payday loans, are not merely designed to turn a one-time borrower into a serial borrower – obviously playing into the lender’s hands.
- Due to their easy-to-obtain nature, online personal loans are among the best available to those who are burdened by the weight of bad credit. Lenders understand that online loans are often the last resort for such borrowers.
- Unlike a traditional loan, there are typically no penalties for paying an online loan off early. This means that the loan can be paid off at a time that suits you, with payments managed over the internet to maintain this level of convenience.