2 minute read
What you need to know about online loans
There are many lenders that offer personal loans, but one has greatly increased in popularity, particularly during the past few years — online lenders. Due to the relative ease, convenience, and speed of application/funding processes, 32.2% of Americans with personal loans borrowed them through online lenders in 2021, according to Bankrate.com.
Looking to get an online loan? Review the information below to learn more about what’s involved.
Many online lenders allow you to prequalify before applying so you can check your potential loan amounts, rates, and payments with no impact on your credit score. It’s a great option that allows you to research different lenders, free of cost or obligation. By shopping around, you have a better chance of finding more affordable funding options.
There’s a wide range on the amount you can borrow, depending on the lender and your credit situation. It’s important to borrow only as much as you need to avoid a longer repayment term with more interest charges.
Unsecured online loans usually have less stringent qualification criteria than a traditional bank, so it can be easier to get approved. The downside with the easier process and higher approval is that there’s a higher risk to the lender — meaning higher interest rates. Average APRs for loans have also recently increased due to inflation.
The application process is convenient because you can do it all online at any time. Basic information is required, such as employment/source of income, checking account, social security number, home address, email address, etc. Plus, approval decisions are typically sent on the same business day.
You can receive your loan funds within a couple days, via direct deposit into your checking account or mailed as a check. Some lenders are even offering same-day funding to a debit card.
The fees may also be lower overall since online lenders don’t have to cover the same overhead costs as brick-and-mortar institutions. Be sure you are informed of all fees before you sign a loan agreement.
You can log in to your account at any time from a mobile device to make payments, update information, and more.
You don’t get in-person customer service, as you would at a bank or credit union. You communicate with the lender over the phone or virtually.
Should you borrow online?
If you’re thinking about getting a loan online, consider your financial situation and how fast you need funds. Credit score is an important factor because it affects interest rate options and how affordable your payments could be. Remember, too, that with an online loan, the customer service experience is different.
Lendmark can help you find the personalized loan you deserve. Go online to start your application, or visit us at your local branch.