There are many online loans available today. The high demand is probably owed to the fact that online lenders offer what borrowers need the most: faster loan approval and disbursement, great convenience and pre-qualification that don’t impact your credit. In essence, online lenders can tell you instantly whether you’re approved, the amount you can borrow, and what your payments will be.
However, there are a few things that you need to know about online loans before you take one out. These include:
What Is an Online Loan?
Online loans are unsecured, short-term loans often borrowed by people who need a little extra money as soon as possible. The main difference between traditional and online loans is that they can be taken out online through an online application process instead of going into the bank or financial institution in person. As a result, this type of loan can be a convenient way to borrow money, offers lower rates and often have less stringent requirements associated with traditional lenders.
What Is the Difference Between an Online Loan and a Traditional Loan?
There are many types of online loans; online personal loans, online payday loans and online title loans. Typically, online lenders will take your application online instead of having you go in person.
Here are some differences between an online loan and a traditional loan:
No in-person contact: With traditional loans, you have to visit the lender in person to discuss what the terms are, sign all your paperwork, and you’ll get your money if it’s approved.
With online loans, you can do all of this online and get your money ASAP.
Quick online approval: With online loans, you can get approved and have the cash deposited into your account as quickly as within a few minutes. That comes in handy when you need cash for an emergency like a broken-down car or medical bills.
With traditional bank loans, this may take much longer because there is a tedious application process and face-to-face meetings that need to take place.
Better terms: Online lenders might be able to offer better rates because there are fewer overhead costs involved, like having physical branches, which could result in online loans being cheaper than traditional bank loans.
Targeted loans: Online lenders can be more open in who they lend to and what the loans are used for. They offer greater flexibility, and you can use the money for almost anything, such as paying bills, home repairs, medical emergencies and more.
How Fast Can I Get an Online Loan?
One of the best things about online loans is how fast you can receive your funds. The approval process can take as little as a few minutes, and if approved, you could have cash deposited into your bank account within 24 hours or less!
Traditional banks and other financial institutions typically offer longer wait times for loan approvals because they need to go over what your loan is for and how you plan to repay them.
Can I Get an Online Loan With Bad Credit?
If you have bad credit, the range of lenders and financial products that will be available to you will be limited, but that doesn’t automatically mean you won’t have access to an online loan.
Well, some online lenders can still offer loans to people with bad credit. But as you might expect, a lower credit score and income can make it difficult to qualify for a loan, and you might accrue a high-interest rate if a lender agrees to loan you money.
How Safe Are Online Loans?
Online lenders like CashFlex must meet the same strict lending rules as brick-and-mortar banks, which mean that your information is safe and secure. They offer comprehensive privacy policies to protect your data, so you don’t need to worry about putting yourself at risk.
They are also regulated by the federal government or other state agencies like banking regulators to make sure they are fair and safe to consumers. However, that’s not to say there aren’t bad players in the industry, but the rouged online leaders are pretty easy to spot. Some behaviors that should raise red flags include:
- A lender pressures you to accept a loan.
- Your attorney general’s office has no record of them
- They guarantee you will be approved, despite your credit history.
- You can’t find anything about them online.
- They reach out to you (via text, email, or phone), asking you to borrow money.
- They ask for upfront fees.
- They continue to pursue you even after you’ve turned them down.
Online loans can be a great option when you need cash quickly. They offer competitive rates, better terms, and faster approval times than traditional banks, making them an excellent choice when you’re in a tight spot.