You may have already come into contact with the staple of the lending and borrowing marketplace – online lending. Online loans are becoming a popular option for many consumers for very good reasons. Online lenders have a lot of new ideas about how they do business, which benefits consumers tremendously in conjunction with many other benefits. Before deciding if an online loan is right for you, take the time to educate yourself on what it is, how you can benefit from it, and how it works.
Make borrowing easier
Let’s face it, borrowing can be time consuming, especially from traditional lenders like banks. You may need to take time off to make multiple trips to the bank during the application process, and after your application is submitted it may take some time to know if you are approved or not.
On the other hand, online loan applications can often be done from the comfort of your home at any time. Plus, you’ll know almost instantly whether your funding has been approved or not. Compared to banks and other traditional lenders, online financing is extremely quick and easy.
For people interested in an online loan, consider using a platform that allows you to research different loans and lenders. The advantage of using a platform with these features is that you can easily and quickly compare a wide selection of creditors and financial products. PrêtsQuébec has its own online platform to consult, search and compare lenders and loans. Consider using our platform today to help you find the right loan online.
Benefits of borrowing online
The idea of applying for a loan online can be cringe. When it comes to finances, there is some comfort in working with someone from a reputable lending institution like a bank. Perhaps this is the reason why online loans have yet to get the excellent recognition they deserve. Once consumers get over running a website instead of in person, they will understand how beneficial online loans really are.
Fast approval time
The online loan approval process is essentially instant. In a very short period of time, you will know whether or not you have been approved, how much you are able to borrow and the cost of your payments. Although banks usually offer applications online, it may take some time to get feedback because someone within the institution has to review them.
No collateral required
Another thing about online loans is that they rarely are). Put simply, you don’t need to pledge assets, like your house or car, to get financing. Without collateral, the borrowing process is much safer for the person taking out credit because they don’t risk losing their valuable assets if they default on their payments. There will be other repercussions on defaulting on a loan, such as a serious damage to your credit score, but at least you don’t have to worry about losing your assets.
Easy to get approved
Banks and other traditional lenders don’t like risk, which has led them to be careful who they lend money to. This is not a problem for individuals with incredible credit, but what about other individuals who are still in need of financing? Unfortunately, those who have bad credit or are in the process of building their credit won’t have much luck with traditional lenders. The good news is that online lenders are more likely to help people who don’t have incredible credit. Usually, online lenders will use other information to assess creditworthiness, such as income and bank statements.
A better alternative to payday loans
In short, payday loans seem like a great idea. However, it is easy to be deceived by payday lenders because they prey on people who need money fast and don’t have time to think about the best loan solution. With that said, payday loans may be the right choice for some, as long as you know what you are getting yourself into and carefully consider the terms.
What is a payday loan?
A payday loan is a high interest rate loan with a short repayment period. Their goal in the market is to deliver extra cash to consumers between paychecks, usually in an emergency. Typically, payday loans are meant for people who are having difficulty making ends meet month to month.
Why do payday loans get a bad reputation in the lending industry?
people often start to rely on these loans to pay their bills and other living expenses. The reliance on payday loans for current expenses becomes problematic as individuals cannot afford the loans they have taken out or end up taking out more loans to cover their costs. It very easily becomes a cycle eventually leading to excessive debt.
Other reasons include deceptive lenders and confusing terms. Payday lenders prey on people who are desperate for money. Desperation makes people think confusedly, which means you are willing to believe that you have found an amazing deal when you are truly cheated. Finally, it is extremely difficult to pay off a payday loan on time when you are already having financial difficulties. Once you miss a payment, interest will quickly add up, an amount you owe on top of the principal. Many do not understand how difficult it is to repay payday loans on time and how high the interest rates are by market standards.
What is a better alternative to payday loans?
The best alternative to payday loans is a short term personal loan from an online lender. This type of loan will have flexible installment payments, a lower interest rate, and highly personalized service. Also, you will have more time to research and compare lenders and financial products using an online lender. Keep in mind that payday loans are also offered online, be sure to do a quick Google search of the lender before entering into the deal.
Simple application, quick approval
Once you have completed all your research on lenders and financial products, the actual online loan application takes only 10 minutes or less. Once your application is submitted, you will immediately know if you have been approved. Sometimes you may have to wait a few days if the lender needs additional information, but in both cases the approval time is much faster than a bank or other traditional lender.
What do online lenders offer that banks don’t?
There have been a lot of changes in the lending and borrowing industry over the past decade, many of which are positive changes. Online lenders are a newcomer to the market compared to banks, but that doesn’t mean they don’t have great ideas or that they haven’t contributed to the industry.
After the financial crisis of 2009, banks and other traditional lenders became wary of giving money with the idea of hedging against another economic downturn. The prudence of traditional lenders has made it easier for other lenders to enter the market, which is precisely what they have done with online loans. The number of online lenders has grown exponentially since 2009 and continues to grow to make personal unsecured personal loans easily accessible to consumers.
No credit check
A tough credit check can damage your credit score. Banks and other traditional lenders perform a rigorous credit check on every loan applicant, as this is an important part of their due diligence. Online lenders usually don’t do a credit check, they use other information to determine your creditworthiness, which will save your credit score. Also, you can take more time to find the right lender because you don’t have to worry about credit checks.
Creativity in industry
With the arrival of new lenders in the market, a lot of creativity and innovation has been introduced into the industry. There are more ways than ever to lend and borrow money. Before this market change, your only option was to obtain financing from a bank or similar institution. It is exciting to know that you are no longer tied to such a conservative lending institution and have other financing options.
An example of an innovative method of lending and borrowing is peer-to-peer lending. How does it work? There is an online lending platform where individuals can lend money to other people and earn interest. Of course, you still need to qualify for this type of loan, but it’s a new prospect for the industry as a whole. It also sparks inspiration for others with creative ideas for the lending and borrowing industry, which means more positive changes are to come.
Is online loan right for you?
If you are looking for financing, it is wise to shop around and seriously consider online lenders as an option. Take a close look at your current financial situation and financial goals to determine if online loans match your financial needs. If you decide that online loan is right for you, Loans Canada can help you find the right online lender and financial product today.