Many people find it necessary to apply for loans from time to time. Some need quick money to pay utility bills, settle small debts, repair a car, pay hospital bills, or handle any other emergency that may have come up. That’s where online personal loans come in.
An online personal loan allows you to borrow money from digital platforms to pay for personal expenses and repay those funds later. And like conventional loans from traditional banks, online personal loans are paid back in equal monthly installments within the agreed time, ranging from a few months to several years.
Pros Of Online Personal Loan
Turning to online portals for a secured personal loan is a good option for various reasons. Some of the benefits associated with it include the following:
1. Saves Time
You’re probably looking for a loan to help deal with an emergency. You may want to complete the process quickly and have the money you need at your disposal. That might not be possible if you go to traditional banks and other financial lending institutions.
There are several procedures involved when applying for loans in traditional banks. You must fill up several forms, make long queues, and then keep making several trips to the bank to confirm whether your loan application has been approved. And this process takes much of your time.
On the other hand, you can save time if you take an online personal loan. It simplifies the whole process, from checking your eligibility to uploading forms. It also eliminates the need to stand in long queues and waste time. You can complete the entire process from the comfort of your home or office.
2. Provides 24/7 Service
If you opt for traditional bank loans, you must wait for the institution to open. In simple terms, you can’t start the process outside business hours. So, this can’t be the best option for an emergency.
However, you can initiate the process with online personal loans at any time of the day. Computers will process the request, and your loan application will automatically be approved if all your documents are in order and your credit score is good.
3. Allows You to Make Quick Comparisons
It’s always good to make comparisons of the various lenders when taking up loans so that you can select the best deal. With traditional loan applications, it can be daunting to compare and contrast the benefits offered by different lenders. As such, you can be forced to stick with the financial lending institution you see first, even if it isn’t the best on the market. However, with online personal loans, you can easily navigate the internet to compare lenders and choose one with the most favorable terms and conditions.
4. Provides Easy Tracking
As noted earlier, the traditional loan application process requires you to keep visiting the finance lending institution to check the status of your application and it may hurt your flexibility and convenience. Online personal loan application, on the other hand, gives you access to all the information you want about your loan. You can also easily login into your account on the lender’s platform and track the progress of your loan application.
Cons Of Online Personal Loans
Although there are several benefits of online personal loans, it also comes with some challenges. Here are some drawbacks of online personal loans.
1. Some Online Lenders Are Not Genuine
Traditional banks and other financial lending institutions are the most trustworthy since they have physical offices and have operated for a while. You can walk into their premises and have a face-to-face chat before you sign a deal with them.
On the other hand, most online lending platforms are new to the market. It’s even surprising that some aren’t genuine with their operations and some are just scammers wanting to steal data from clients. So, if you aren’t careful, you might end up engaging with the wrong person. Therefore, before you start your online loan application process, do thorough research to ensure you connect with a reputable lender.
2. Lack of Loyalty Discounts
Many traditional banks will likely offer interest rate discounts, especially if you’ve banked with them for a while. So, you’ll refund the borrowed money at a lower interest rate than what’s on the market for a similar loan.
Online lending platforms typically don’t have loyalty discounts as most borrowers don’t have existing accounts with them. You must be ready to pay higher interest rates if you apply for online personal loans.
Looking for online personal loans is great, but they also have another side of the coin. Do your research and partner with a reputable or legit lender so you won’t be fooled by scammers. That way, you can find taking an online personal loan a fantastic idea to finance your emergencies.