Instant Personal loans Online – The Trend

In the past, people looking for a loan would get on their Sunday best and head to the bank, trying to look sharp and professional in front of the Bank Manager or their associate while putting forward their best case and request for a loan.

It was very much a face to face transaction and more often than not one that ended in denial of your application if you couldn’t show the bank how much money they could make back from you.

These days the trend of applying for instant personal loans online is the goto method. The internet and e-commerce rules our world, in fact most things these days will have an online presence and transactions will occur behind a computer as opposed to personally. Its just the way it is now.

With e-commmerce and the ability to perform business online a number of banks have staked their territory in the online Loan market.

While it is super convenient you do need to take into consideration of a few factors when researching and investigating this market and Business that are willing to offer you cash. Let’s break it down in the advantages and disadvantages of the online opportunity

The Advantages – How It Benefits you

  • Online Convenience

You cant really put a $$ amount on this factor, but it is one that cannot be discounted. The ability to search, research and apply online without having to leave you home and get to a bank o credit union is huge, especially for those that may not have the ability to get there, may be remote or unable to drive to a traditional bank.

Normally the technology allows you to start and save your application so that you can come back to it and complete when you have all the pertinent information. That’s Golden

  • Lower Interest Rates and lower or No Fees

Generally this is what you would expect as the majority of online lenders do not have physical locations or branches that you walk into to get a loan. The savings that these companies make by not having to pay for physical locations is purportedly passed onto you, with offering lower interest rates and no origination or loan establishment fees.

Some lenders do this, but check the fine print in the terms to see if you do have an origination fee which falls between 2-6 % of the loan amount. That can be a pretty hefty additional payment you need to be aware of.

Obviously your credit rating will ultimately determine what rate and offer you receive with the loan, but all things equal you should experience lower rates than if you went into a bank

  • Liberal Approvals – Poor Credit is never too Poor

While Banks and Credit unions and your traditional banking systems are fairly discriminatory in terms of who qualifies for a loan ( Credit Worthiness ) the online loan sector does not appear to be as set in their ways.

Depending on the online loan company you apply with, even with a low or poor credit rating you can still obtain a loan. Some companies are known to specifically cater to people who fall in the poor credit bracket. The caveat for these poor credit lenders and something to be highly vigilant for, is the interest rate and terms of the loans.

If you fall into this category take your time to review the offer and terms and interest rate to make sure you can service the loan payments.

  • Instant Rates and fast Turn around time

Several online lenders are able to give almost instant rates or pre-approve your loan without you having to labor trough an entire application process.

This enables you to quickly gauge if the terms and payments are something in your ballpark figure or not without wasting unnecessary time without performing a hard credit pull which does bring your credit with each credit pull activity.

Not only can you receive instant rate quotes, but a successful loan application can see fund hit your account within the next business day or two.

The Disadvantages

With the pro’s there are always the cons. Here are a few to keep in mind.

  • No Face to Face Customer Service

Just as these online lenders may not have a physical space to go it, which should lead to savings to the applicant, at the same time if can also be a disadvantage as you do not have anyone that you can have a face to face conversation with.

Not withstanding the likelihood that you will have a number to call and have some instant chat messaging with a support person, you definitely will not have that warm and fuzzie face to face with a customer service consultant. If you prefer that than the online option is probably not for you.

  • Security Concerns

These days with identify theft and other online frauds accruing consistently if is a factor that does come into play when applying for anything online. People are wary of handing out information online and rightly so. I would def do you research on the online lender you are contemplating doing some business with to vet them and make sure they are legit before handing over personal details.

  • Technology issues

For some of us the thought of getting online is a whole other dilemma. Some people, like my older parents are technology adverse and it can be frustrating to work with technology. For these folks the traditional loan process is probably the best path to select going forward.

The Bottom Dollar

Online lenders, reputable ones offer another option for people who may need cash fast and cannot provide a high enough Credit score for your traditional banks and credit unions. There is definitely a place for short term loans but be sure to take some time to research all the online banking options.

Don’t discount your current situation that could have you having banked with a traditional Bank or Union for years. When you have bank history it is worthwhile approach them before looking online. You could be pleasantly surprised by your current bank’s offer to keep you as a customer

Look out for our reviews that I will be posting soon to gave you the quick glance on a few lenders in this space.

Good Luck


Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution


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