Tag: online lenders

  • The Benefits of Online Borrowing

    The Benefits of Online Borrowing

    The Benefits of Online Borrowing
    When examining for online loans, you’ll find lots of offers for loans that are basically payday loans. Avoid them.

    By Guy Avtalyon

    Online banking is broadly used and more and more people are accepting online loans as safe and convenient with the understanding that the benefits of online borrowing are numerous. Some lenders are quite good and trusty. The procedure is similar to getting a loan wherever but more comfortable. The whole process will take just a few minutes after you provide all the info that the lender may ask. Usually, it is your address and social security number. Some lenders may ask for more information about you, for example, what is your job, position, expenses, income. You can find a lot of online lenders out there and you can easily pick some the most suitable for you since online loans are safe and convenient. 

    The benefits of online borrowing 

    The last generation of online lenders is dedicated to making borrowing easy and fast. One of the benefits of online borrowing is that you can avoid the whole long-lasting process with traditional lenders and banks. In several minutes you’ll get the information about whether you get approved or not for the loan. That’s a very important feature when you are in an urge to get cash quickly. 

    Also, one of the benefits of online borrowing is that the lender will tell you how much exactly you can borrow, everything about your payments, etc. That is something that most traditional banks can’t do even if you apply online. 

    Banks will need time to give you the answer, that has to pass several reviews and some internal procedures. So if you are in a hurry to get the cash they might not be so suitable for everyone. Also, one of the very important things, but we rarely think about it when we are in a rush – the interest rates. Online lenders will offer lower interest rates but also, smaller fees if there is any. That’s because online lenders don’t have some expenses that traditional banks have.

    Better approval chances

    What are the additional benefits of online borrowing, also? For example, if you have bad credit and traditional lenders will pay more attention to it. If so, you’ll have better approval chances with online lenders. They will approve a loan even if your credit score is lower because they’ll take into consideration some other criteria when deciding to give you a loan. For instance, how regularly you are paying utilities, what is the ratio of debt to income, etc. 

    As it is with most of the personal loans, online loans are unsecured. That can be one of the most important benefits of online borrowing. Let’s say you fail to repay this kind of loan, it may happen due to many reasons and not always intentionally. In such a case your credit score will fall for sure, but any of your assets won’t be taken from you and you’ll not experience the foreclosure.

    The internet makes it easier

    Well, applying for getting an online loan isn’t quite the same as you are ordering food online. Some risks are higher when you apply for an online loan. When applying for it, they will ask you for sensitive personal information. The problem is that you have to provide them to someone you don’t know and can’t see but you have to talk about a nearly large amount of money. Anyway, a large amount for your criteria. Yes, the internet makes it easier and the benefits of online borrowing are obvious for you but still you have to know who you’re dealing with. So you have to be sure you’re dealing with a legitimate lender. 

    The risks when borrowing money online

    The first is that you might have contact with the fake lenders and you could lose your money without getting a loan. We are pretty sure you have been reading about these scammers that leave people without money. Also, some of them will take from you more in fees and interest even if they promised it will be less.

    Maybe one of the most dangerous risks is identity theft. It can happen that you’re dealing with a website that doesn’t protect your personal info properly. Maybe they don’t want to steal your identity but your personal information may be available to the third party who can misuse your security number, address, or similar.

    How to pick the right lender with the benefits of online borrowing

    By picking a legitimate and trustworthy lender you’ll avoid a lot of problems. You should research lenders. Read both positive and negative analyses. The internet is great but at the same time a strange thing. Not all the truth is out there, so you’ll have to make the selection to whom to trust. The best source is a recommendation from someone you can trust. Never base your opinion on reviews written by employees. They are paid to write the best or some of them lost the job there and now are pissed-off. So, their reviews can’t be honest. Avoid that. 

    Always check for complaints with the U.S. Consumer Financial Protection Bureau (CFPB). CFPB holds a database of complaints and responses from the lenders. The better your source, the less likely you are to find yourself in a problem and you’ll be able to enjoy the benefits of online borrowing.

    Online lenders are rising

    About a month ago we read an article in The Guardian. Excellent as always and very dedicated to this pandemic situation and the role of online lenders. We fully recommend reading it HERE.

    But in short, the article is about online lending and how online lenders plan to satisfy customers’ requirements during and after the newest COVID-19 pandemic. This is an important issue especially after big banks “have dropped the ball.”

    The characteristics of online lenders

    Online lenders are non-traditional and unconventional. They will rarely have some other financial products except loans. So we can say they are focused on one or two types of loans. Online lenders will not offer credit cards, savings accounts, or checking. 

    In their early days, lenders were peer-to-peer services. Their business models were alike to online shopping. Everyone could apply for a loan and anybody could offer to give a loan. The lenders would choose the interest rate that they expected to get. The competition was great so the loans were given at the lowest interest rates. 

    Today, the system has changed and become more complicated. If you really want to avoid banks, check deeply because some of the biggest sharks stand behind leading lenders.

    Bottom line

    The benefits of online borrowing are various. You’ll need less time to apply, you can overcome a bad credit score, the loan will be approved in a few minutes. The additional benefits of online borrowing are that you don’t need to go anywhere. You may apply from your home, your phone walking on the street or sitting in the restaurant. But, if you want to pick the best for your needs, you’ll need to shop around and search for the most suitable. While doing so, avoid scammers even if you think they have the best offer and cannot steal your personal data, be careful. Also, avoid payday loans. If you are not sure which online lender to choose maybe you should try with some bank. You will not get the best option but the safest for sure.

  • Good Reasons to Take a Loan – Make a Difference

    Good Reasons to Take a Loan – Make a Difference

    Good Reasons to Take a Loan
    Everyone can find good reasons to take a personal loan, but keep in mind that no matter the situation, it must be paid back finally. 

    By Guy Avtalyon

    The personal loan is borrowed money but what are good reasons to take a loan? Where are you gonna spend that money? Would you like to make some large purchases, ease financial difficulties, or to remodel your home?

    You have to pay back this loan in monthly portions typically for the next two to six years. Yes, typically, but it might require more time to pay back it all. It depends on your financial situation and how careful you are with that financial obligation.

    Maybe it may look silly to take out a personal loan for, for instance, personal reasons, but it can be very useful in some cases. Of course, when used and paid back on time.

    Good reasons to take a loan are numerous, but it isn’t a solution for every financial situation. Usually, people take out a loan to solve improper money management. 

    One of the good reasons to take a loan can be if you have credit card debt with high-interest rates. That can be a difficult and very serious problem. The more interest you owe, your payments will be higher, and you’ll need more time to be debt-free.

    The variety of good reasons to take a loan

    As we said, if you have credit card debt and the interest rate is high it is smart to take a loan, of course, if you are qualified, so you could pay off your debt faster since the personal loan is with a lower interest rate. Hence, you’ll spend less money on that obligation. For example, a bad reason to take out a loan is to invest in the stock market. If you want to do that it is smarter to save and then invest.

    If you think that good reasons to take a loan can be your vacation or wedding, we are so sorry but you couldn’t be more wrong. 

    To consolidate debt it is a smart decision

    Actually, it is one of the most common good reasons to take a loan. For example, if you have various loans or credit cards and they all have different interest rates and balances. It might look like open doors to the trouble. To cover them all or a bigger part of them could be one of the good reasons to take a loan.

    When you take a loan and if you use it for debt consolidation, you’ll connect all of those balances into just one monthly payment. By this, the connecting of all debts will make it easier to pay off and you’ll avoid getting overwhelmed.

    A personal loan is at lower interest rates which will reduce the amount of interest you pay and the time to pay off your debt. Consolidation allows you to pay off credit cards with a clear end and shorter time frame.

    If you need money for moving expenses 

    That is one of the good reasons to take a loan if you have to relocate over a long-distance move. Costs could be very expensive on such an occasion. Yes, expensive enough to take a loan.

    A loan can help you move your furniture or other household things. But also, it can help you to buy new furniture for your new home, to pay for the service to transfer your car to another country or something similar. But before even asking for a loan, think will your income be able to cover the pay off your loan balance. This estimation will help you bypass the added burden of paying off your loan when starting a new life in a new place.

    When you have to remodel your home

    Home remodeling is also one of the good reasons to take a loan. Doesn’t matter if you need a new roof, solar panels, a new kitchen, or a swimming pool, it is smarter to take a loan for that to finish. Especially if you don’t have ownership of your home or you want to avoid a mortgage on the home you own. 

    When taking a loan for home remodeling there is no limitation on what you’ll spend the fund on. You can spend on landscaping or hardscaping, hot tub, new windows, paint the whole house, install the new heat infrastructure. There are no limitations. A personal loan is great to help in such situations when you don’t have the cash on hand right now but you’re in need.

    Instead of a payday loan

    If you’re suffering financial difficulties, you may be motivated to take out a payday loan. Be careful, payday loans are expensive and can put you in much worse situations than you were before. Therefore, a personal loan is a better solution.

    Payday loans are easy to get, but they have big risks. For example, interest rates are enormously high,  some lenders will charge you more than 500% in APR.

    Most US states have usury regulations, for instance, that limit the lenders to charge the interest of over 35%. But, payday lenders are allowed to charge their high-interest rates. Regulations on this kind of loan are controlled by the states and some states even forbid any kind of payday loans.

    For example, in California, a payday lender is allowed to charge a 14-day APR of 459% for a loan of $100. Fees on these loans are also high, they can range up to almost $18 per each $100 of loan. So, the better choice is to take a personal loan instead of this costly one.

    Good reasons to take a loan are unplanned emergency expenses

    For example, to finance funeral expenses. This isn’t a pleasant issue and the majority of people avoid discussing it. The truth is that funeral expenses can be very costly. If your family doesn’t already own you’ll have to buy a burial plot, to pay funeral home services, a coffin, and you’ll have to pay some other things which, in total, may cost you up to thousands of dollars. Remember, death is costly besides it is a sad event.

    A loan can be a crucial source to cover all costs when a family member dies. In such a situation everyone needs money quickly and if the deceased person’s savings cannot cover the expenses of the funeral some family members have the opportunity to apply for a personal loan, also such it is the ethical obligation to cover the deceased’s last costs.

    Paying medical bills is another reason to take a personal loan. The loan can be used for corrective surgery, dental intervention, fertility treatments, etc. Each of them can cost over $5.000. Added costs can be medications, aftercare, or medical travel expenses. All of them are possible, and sometimes necessary, to finance by a loan. 

    Good reasons to take a loan: you need to make a large purchases 

    Household accidents can come suddenly. If you quickly need to buy a new fridge, dryer, washer, the new computer for a job but don’t have the money on hand, a personal loan is the first aid. 

    Of course, there are so many expensive things you would like to have in your home such as entertainment things. However, it isn’t a smart decision to take a loan to buy them. Take a loan only for the things you really need for a normal life. Use it to buy the new oven, to remodel and equip the bathroom, for something that is undoubtedly necessary. For example, electronics! You’ll need months of savings to be able to buy them. Instead of waiting, you can take a personal loan and purchase them immediately. 

    Also, if you don’t have tens of thousands of dollars at disposal, you’ll take a loan to buy a new car, recreational vehicle, or boat, for example. 

    Who are lenders?

    Online lenders are set to make borrowing as easy as possible. They will tell you immediately all about your approval, if your application is approved or not, how much you can borrow, and many other things.  This kind of lender will offer lower interest rates and lower fees if they have any. Also, your approval chances are better with online lenders especially if your credit score isn’t great.

    Don’t worry, in most cases online loans are unsecured. That means you don’t need the collateral to get approved. That makes them safer. If you miss paying the loan, your credit score will fall, but your washer will stay at your home and you won’t suffer foreclosure.

  • Personal Online Loans – Everything You Need To Know

    Personal Online Loans – Everything You Need To Know

    Personal Online Loans - Everything You Need To Know
    The lending process is much faster if you are taking out a personal loan online. The whole process can be made from your home. Very often, you’ll get the funds deposited into your account within one or two days.

    By Guy Avtalyon

    Personal online loans can be easy to apply for. Online lenders usually offer low-interest rates, so it is important to note when you have to decide should you do or not that. The other benefit of personal online loans is that it is so easy to compare different offers from different lenders. Easy and quick. Besides specialized online lenders, many others are allowing you to apply for a personal online loan. Sometimes, you may get a loan under better conditions using their services.

    A personal loan from some online lender can bring money into your account instantly. Sometimes during the same working day.
    Also, for personal online loans, you can apply through solely online lenders or through some financial companies or institutions that also have online loans as an offer.

    What is a personal loan? 

    It is a loan that you, as a private person, take out for a short, limited time. It can be between two and five years. The time is fixed and doesn’t vary, which is different from the line of credit or a credit card. For most US residents personal loan amounts are from $1.000 and $100.000. This depends on your demands and your creditworthiness. Banks and lenders have individual limitations, a set of rules, on how long and how much someone can borrow for a personal loan.

    One of the characteristics of personal loans is that they are typically unsecured. And that is an advantage of this kind of loan because you don’t need to provide some kind of collateral. For example, you don’t need a house as collateral backing the loan. 

    There are many lenders that offer personal loans. Lenders could be traditional brick-and-mortar banks or online-only. They accept borrowers with various credit scores, income, and other conditions needed to get personal online loans.

    We will walk you through the process of how you can find the right lender for you depending on your income, credit history, interest rates. We will explain to you what you can’t use the loan for. Picking the right lender may save you a lot of time but, as more important, a lot of money.

    Personal online loans offer a handy solution

    For example, you need cash and you need it quickly. The main advantage of online lenders is that they can give you a quick answer to your request. So, online lenders are a quick, suitable choice, maybe more than banks or credit unions. 

    The other benefit is that online lenders usually offer lower rates but there are also some other things, very important and useful if you choose to apply for personal online loans.

    First of all, the majority of online lenders allow you to pre-qualify. That is a unique offer because you can compare rates from different lenders by pre-qualifying online and find the lowest. The other benefit is that they can fund a loan very quickly, the approval will come on the same day, sometimes in the space of several minutes. The loan will be funded inside a day or two. 

    Those are important things that make online loans different from others.

    The purposes to get personal online loans

    Personal loans are not an answer to all financial circumstances. Yes, sometimes they are simply a band-aid on incorrect money management. But it can help you if you have credit card debt with high-interest rates, for example, that is almost 25% per year. If you succeed to get a personal loan with a lower interest rate, you’ll be able to pay off your credit card debt faster and pay less on interest.
    Such refinancing is a good example of the purpose to spend your personal loan.

    But we have bad purposes too.

    Don’t try to get a personal online loan if you want to invest in stocks, for example. For that kind of purpose, it is better to save and then invest.

    Maybe the worst purpose of getting a personal loan is for vacations, expenses such as a wedding, expensive rings, or similar. Also, it is better to save for that.

    Someone would like to repair a home and think the personal loan is the best solution. Well, it couldn’t be more wrong. For that purpose, it is better to use a home equity loan since it has a lower interest rate.

    Steps to take before applying for personal online loans

    Before you start the process, decide how much money you really need. The sum you want to borrow should be based on the debt you have to cover and your income. Avoid stretching yourself too thin. If you take out a too-small loan it wouldn’t cover your needs, but also, the too-large loan will put you into paying interest on a larger amount than needed. So, you have to calculate the amount you can handle and do it before applying.
    Also, pick the right type of lender.

    Banks and credit unions take much longer to process your request than online lenders. They also require fewer documents and the application itself is less complicated. And sometimes the speed is most important in getting personal loans.

    The advantages of personal online loans

    Personal online loans have a big advantage – they are comfortable. 

    Doesn’t matter if you choose an online-only or branch-based lender. Both will provide you the loan application online and the possibility to upload verification documents. For example, you’ll need a driver’s license. Well, some branch-based lenders will require your signature on the final documents at a real branch. That is a kind of disadvantage since you would like to apply online. You will not have such a problem with online-only lenders. The whole loan application process will be done online for sure. 

    Prequalification will not hurt your credit score. Moreover, you can submit several prequalification forms to expand the list of possible lenders. 

    The next step is to complete a loan application and agreement to a hard check on your credit reports. Both types of online lenders, online-only or branch-based, require a hard credit check before you sign for a loan. Generally, these inquiries could affect your credit score. But one inquiry will have a small influence on your overall credit score and shouldn’t discourage you from applying for a loan.

    The particularly great advantage of personal online loans is that you can easily compare all your options. The benefit is that you could get the best rates and loan terms for your needs this way. 

    If you want to compare lenders, find a website that allows you to instantly classify and match lenders and loan options based on your situation, and wanted loan sum.

    Disadvantages 

    Online loans may cost you. They are not cheap and usually, they are costlier than loans from credit unions. The problem can arise with different formulas for underwriting because almost every online lender has its own. Also, sometimes it can be difficult to go through the application process for some types of personal online loans. For example, secured personal loans or co-sign loans have complex processes. 

    Also, if you want a loan under $2.000 it might be hard to find a lender since most of them have a minimum at that sum. 

    The main problem is to find reputable online lenders. You can see the ads of some lenders that they don’t care about your credit score or something else that may sound very lucrative at first sight. In most cases they are scammers. Legitimate online lenders will always check your capability to pay the loan. Yes, they will charge you the annual rate from 10% to 30%. The rates will differ based on your creditworthiness, the period of the loan, the loan amount, and, of course, the lender. 

    So, you must be very careful when choosing the lender.

    How to shop for personal online loans? 

    Here are several questions that you’ll need to find the answers for while looking for lenders.

    Online lenders examine extra factors, for example, your education, profession; but only those information related to your credit score and credit history. If you have a bad credit score, you’ll need to fix it first. But remember, it isn’t impossible to get a loan even with a bad credit score.

    What you have to know is the annual percentage rate (short APR) below 36%. That is the amount of the interest rate and all fees. If it is below 36%, financial experts agree it is reasonable for you as a borrower. If some online lender offers APR over 36% you can be certain the loan is unreasonable even if your budget can afford it.

    Do you have all your documentation ready? You can get rate quotes by providing several personal data. But when you decide to apply for a loan, lenders will expect documentation. That is ID form and proof of income, a pay stub or W-2. Still, you can easily upload all documentation, some lenders will accept screenshots, PDFs, scanned documents, or photos taken by your phone.

    The cost of personal online loans depends on your credit score. If you have a better score, you’ll pay the lower rate and less interest. Pay attention to interest rate since it can influence your complete monthly payment as well as the term of payment. If you get a longer-term loan you’ll pay less per month, but the interest amount can be bigger.