Gone are the days when you needed to put on your Sunday best and go to your bank in order to get a loan. Whether it be for a home improvement, car loan or any other reason that you need the money for.
The Internet has been a game changer when it comes to helping products and services evolve. Now, people can apply for a loan in the comfort of their own homes even with their pajamas on. Online personal loans have changed the way lending and borrowing transactions are done.
It has been rapidly increasing in popularity with personal online loan lenders funding loans that are now in the billions of dollars.
We now try to find out if personal finance loans are indeed beneficial to consumers. Why are there more people availing of these types of loans than stick with their banks?
Great For Emergencies
Coming up with a budget and a plan for expenses is now popular for most people. But there are times when the unforeseen happens and we need quick cash. Emergencies like losing a job, hospitalization, and unexpected home repairs are among the emergencies that we fail to plan for. Applying for a loan with a traditional provider may take a long time as compared to online lenders who sometimes can approve a loan in an hour. There are also no questions asked about what you need the loan for, you can practically use it for any need that you may have.
Fast And Convenient
One of the biggest reasons why more borrowers choose online personal loans over a traditional loan is the ease and convenience they offer. The process can be done in a matter of minutes by applying online. This can be done anywhere as long as there is an internet connection and approval can be done in just a matter of hours. All initial interactions with the lender are done online which takes away the need to make frequent trips to the bank when applying for a traditional bank loan.
Less Strict Requirements For Approval
Banks are wary when it comes to lending because of the global economic slowdown. This has been beneficial for personal finance loan companies and it has made them flourish.
Online lenders have easier loan approval requirements as long as you have the right credit score. Majority of online lenders provide unsecured loans which do not need collateral for loan approval. There are even online lenders who specialize in giving loans to bad credit borrowers. Some lenders will even fund those who have no credit history at all. This is the reason why demand for online lending services have skyrocketed the past few years.
Competitive Interest Rates
In majority of the states, payday lenders are strictly regulated and are only allowed to charge specific interest rates. This is done for consumer protection because borrowers have a tendency to misuse their personal loans. There is transparency with all transactions, the rates and terms are clear to the borrower. All pertinent information regarding the loan is also provided.
When an online lender provides a loan that is unsecured, this may mean a higher interest rate due to the higher risk that the lender is facing regarding the loan.
A Lot Of Online Lenders
Because of the huge demand for online lending services, there are now a lot of reputable lenders that can be easily accessed online. Competition is a big benefit for borrowers because this means that lenders will aim to offer the best services in order to win consumers. This results in lower interest rates, faster processing times and excellent customer service.
24/7 Service
There are times when money emergencies occur late at night or very early in the morning. During these times the traditional sources of money are closed. With online lenders, loan applications can be accomplished at any time. Approval can also be granted within a few hours after you apply.
After knowing all of the benefits of online personal loans we now know why there is a huge demand for it. It is fast, easy, convenient. There are so many choices when it comes to lenders and the rates are competitive. There are less headaches and it gives the best over-all experience for the borrower compared to the traditional loan process with banks
