Loans which are operated by online lenders and where the whole procedure is processed via the internet, those are known as Online loan. Various types of loans are available through online action.
First, you need to call on a website of the loan provider to fill the form to apply for the loan. Now, the second step is based on which type of loan you are taking if it needs a credit check or not.
After this, if you get approval for the loan then that loan amount would be transferred to your account. In the case of refunding also, the process is online.
But one thing to keep in mind is that not all online lenders are genuine. You need to verify them properly.
Online loans are different from offline ones in terms of various following things:
- Convenient: Their process is a way easier than other loans. If you’ll have a good credit score then you can get a loan within few hours with low interest but in case you don’t have then also you can get a loan with just a few clicks (conditions applied)
- Faster: Also, these loans are quicker in terms of approval and funding. Online loan providers let you know very quickly either you are approved for a loan or not. They don’t take much time for the procedure. That’s instant loans are better online.
- Loans without collateral: Many online loans are unsecured loans that mean you don’t need to put your valuable thing like gold, property as security. In case you get failed to refund your debt then your score may suffer and you’ll get some repayment offer with high interest but there is no fear of losing your property.
- Installment loans: Small loans that are paid in fixed monthly installments with interest. You’ll have to pay a fixed amount on the due date of every month. Some believe that this kind of loan is less stressful as you don’t need to pay the whole debt at once.
- Signature loan: This loan is basically for those who have a bad rating of credit so someone as a guarantor can sign for you as a guarantee and help you. But in case, if you get failed to pay your debt then it will ruin a credit score of your guarantor.
- Payday loan: This loan can act as a lifesaver at some circumstances when you don’t have anything for collateral and even bad credit or no credit. But it doesn’t mean that it’s that much easy, in fact, you’ll have to pay higher APR for that. Nevertheless, having at least one expensive option is better than no option.
- Business loan (Small scale): If you want to expand your business which needs funds, then you can choose a business loan online. It’s a kind of installment loan where you have to pay the debt in several payments.
- Peer to Peer loan: As the name suggests, this is not an official loan taken from banks or licensed lenders but can borrow some money from other people (who want to make more money from the money they have) on interest. You can find your lender online on various peer-to-peer websites to match your ability.
- Debt Collective loan: Loan which can consolidate all your loans into one can also apply online. This is for people who have several loans and feel difficult to handle all. Hence, it combines your interest in spite of paying different interests for different loans.
In the end, there are many benefits of online loans as you can apply from anywhere, you don’t need to go to banks or stores for loans. But with benefits of this, you can’t ignore a few facts about this, for instance, Spam – It may happen that the lender you have chosen is not truthful.
But you can check it via keeping few things in mind like:
- Is there any advance charges.
- Check if it is licensed or not.
- Check thoroughly the contact details of the company
- Check on your BBB website (if that company registered or not)
- Go through the reviews of prior customers.
- The address must be verified.