Getting a loan from the bank or other institutions can take a while before you get an approval. If you are in need of fast cash, then you may take into consideration getting an online loan application. You will no longer need to wait for a week or a month's time to get an approval for your needed loan.
It may feel like an online loan is such a great way to have money fast. However, together with the many advantages, it also has its downsides. So what are the advantages and disadvantages of an online loan?
Let us first look at the benefits that you can enjoy when getting this type of loan.
1. Easy approval – Compared to other types of loan, it is much easier to get an approval. Online lenders often have low criteria which you can easily meet in order to get an approval. This can include having a stable source of income, a bank account and being of legal age.
Even if you have bad credit, there are online lenders that offer online loan services that are tailor for your needs. If you apply for a loan from the bank with a negative credit rating, your application will most likely end up returned.
2. Less hassle – The tiring part when applying for a loan from banks and other institutions are the paper works that you have to submit and fax to them. You will need to submit the right credentials in order to get a loan approval. However, when you apply for an online loan, you do not have to go the same tiring tasks. You will only need to fill up an online form and you're done.
You no longer have to wait in line or travel personally to the bank or other institutions in order to apply for the loan. This saves you both time and energy, as you can do it comfortably in your own home with your computer.
Although there are a lot of advantages that may make an online loan application very attractive, it also has its downsides.
1. High fees and interest rates – Professionals would advise you not to get this loan, unless the need is urgent. Online loans have higher interest rates and fees, compared to normal loans.
Aside from the high interest rates and fees that you have to pay as you apply for the online. You will also have to pay a fee if you are late in your payment. Most late repayment fees that are charged by online lenders are quite great that they can reach up to double or triple the amount that you have borrowed.
2. Short repayment course – Normal loans from banks and other institutions can give you a repayment plan that divides your debt payment in a long span of time. Repayment can be done within the span of a year or two when getting a normal loan. An online loan however, requires you to settle your debt within a shorter span of time. It can be within two weeks or a couple of months.
3. Vague terms and condition statement – In some loan services, there may be certain terms and conditions that place you in a high risk situation. This is often intentionally hidden or made unclear, since they do not want you to know about it.
Although useful, there are things that you need to take into consideration before getting an online loan application. You should always weigh the pros and cons before deciding on anything.