When you need financing, there are generally two places you can turn to: in-person and online lenders. While conventional lenders have been around for ages, online loan platforms are starting to make a name for themselves among potential customers. If you’re trying to decide between the two, then here’s why online loans might be the right choice.
What is an online loan?
Online loans refer to any type of loan that you apply for on the internet rather than in-person. Many online loan providers offer a suite of various financial products, such as:
- Installment loans
- Lines of credit
- Title loans
- Payday loans
Each of these loans comes with its own benefits and repayment terms. So, it’s important for an applicant to understand the differences and choose the one that fits their needs.
The advantages of applying for a loan online
There are many good reasons for someone to get a loan online instead of applying in person with a conventional lender:
Convenience
What could be easier than opening up your laptop and applying for a loan from home? This can be far easier than having to schedule an appointment with a lender and taking a trip to a bank or store location.
Speed
Instead of having to wait multiple days for a conventional lender to review your application, an online loan provider will often tell you within minutes whether you’ve been approved or not. This is because these platforms use automated algorithms instead of people who manually process the loan.
On top of that, many online loan providers can transfer funds as soon as the same day or the next business day. That’s much quicker than the days or weeks it can take for a conventional provider to release funds.
Flexible requirements
Online loan providers aren’t nearly as strict about the application requirements as traditional lenders. Borrowers with poor or no credit history will often have more success qualifying for an online loan than a conventional loan.
Security
Reputable online loan providers use data encryption to ensure that all your information is secure. So, there’s no need to worry that your data will end up in the wrong hands.
The drawbacks of applying for a loan online
Of course, getting an online loan won’t be for everyone. There could be several reasons why someone might prefer to work with a lender in person rather than by computer.
Must be comfortable with technology
Getting an online loan requires a borrower to go to the lender’s website, fill out their information, and click through each screen from start to finish without any assistance. If you’re someone who doesn’t feel confident navigating the Internet, then applying in person may work better.
Less personalized experience
For some people, there’s a certain level of familiarity when it comes to working with the same person from a financial institution. They may also prefer the personalized experience that only comes from working with a representative in person.
Is applying for an online loan right for me?
Online loans have made it incredibly easy to get financing. Not only are they safe and convenient, but they’re also more flexible than loans from a conventional lender. However, applying over a computer and sacrificing the ability to work with a real professional won’t be for everyone. Ultimately, you’ll need to weigh the pros and cons of both approaches and choose the path which works best for you.