Let’s face it. The money we earn from our day jobs sometimes aren’t enough to cover all the expenses we need to maintain our home. No matter how hard we try to budget them, unexpected events like emergencies crop up, totally disrupting one’s budget if you haven’t prepared emergency funding for it.
Good thing though that some banks and lending institutions came up with the idea of making loan applications easier for common people. By harnessing the power of the internet and technology, they came up with the concept of online loans. You also may find your ideal details about payday loans on pfi loans.
What are online loans?
- Borrower simply needs to fill up an online loan application form and attach supporting documents and submit it using the internet
- Two kinds of online loans available:
- Unsecured loans
- Doesn’t require pledging of a collateral to procure loan amount needed
- Secured loans
- Requires borrower to pledge collateral (house, car, other personal/private property)
- Typically have lower interest rates as compared to unsecured loans
Perks of online payday loans
- Faster and easier approval
- Lower eligibility criteria needed to meet than traditional loan methods
- Stable source of income
- Active bank account
- Legal age status
- Credit rating doesn’t have much of a bearing in online loan applications.
- Less hassle
- No need to submit documentation for loan approval.
- Fill up online application form and click submit for the lender to review your loan application.
Despite its perks, there are still some things that you need to know before jumping into online loan applications.
- High fees and interest rates
- Online loans have higher interest rates as compared to normal loans
- High repayment fees if borrower pays late for the loan
- Shorter repayment course
- Borrowers need to settle the debt anywhere from a two weeks to a couple of months
- Unclear terms and conditions clause
- Some terms and conditions statements can place the borrower in a high risk situations (intentionally made unclear)
As financial experts say, always think through one’s decisions before finalizing them. So, it’s best you think twice before jumping on the opportunity of online loan applications.