From the point of view of improving the standard of our lives, loans have always been an integral part, be it the professional face or the personal face. If we are not filthy rich, then sooner or later we are sitting opposite the bank manager explaining why we need the money. Be it for studies, a new house, a new car, or for a wedding, loans have made many a borrowers worried and all lenders happy.
From the start of the money borrowing and lending system it has always been a tedious process for the borrower. In earlier times the debtor was helpless and had to abide by the conditions for repayment set by the lender. This mostly led to difficult times for the debtor and his family (details in Munsi Premchand’s Godan). But with the establishment of banks, rules have been set and since then things have been comparatively easier for the borrower.
Yet still the wait from the time of application for the loan to actually seeing the money in your hand is a lot. It is customary for banks to make you jump through a lot of hoops before actually handing over the money. It is ironic that you have better chances of getting a loan if you can prove that you don’t really need one!
Applying for loans online
To quicken the process of receiving loans and to fight competition many banks and lenders have come up with the concept of online do it yourself loans. These companies mention easy steps on their website which you can follow and quickly get your loan sanctioned online. The below mentioned general steps outline the process of getting an online loan:
- Finding a company that provides loan online: Google and find a company that gives instant, personal or payday loans.
- Complete the Online Form: The online form given on the lender’s website would mention clearly the details and information required. Fill up the same along with your full details. Also required would be a checking account where the loan would be transferred.
- Approval/Rejection: Post review of your application, your loan would either be approved or rejected.
- Terms & Conditions: If the loan gets approved then you would have to agree to a host of conditions provided by the lender. Carefully go through each and every condition (especially the ones specifying the rate of interest and fees being charged) and if you are fine with them then agree to it.
- Receive the money: After you agree to the conditions the lender would wire the money to your checking account.
Advantages of Online Loans
The benefits one enjoys with online loans are:
- Quick and Easy Approval: Banks and Lender Companies approving loans online generally have low criteria which can be met by most to obtain a quick and easy online loan. These criteria may be: having a stable income, being of legal age, having a bank account etc.
- Fewer Hassles: The frustrating part about traditional loans has been furnishing all those documents and paper work. With an online loan however, you just need to fill up a form on the lender’s website and that is it! Also you do not have to waste time travelling to the branch every time some document or the other is required. You can directly apply for an online loan from the comfort of your home.
- No need to locate a branch: All the hassles with going to the branch physically to complete the formalities can be happily forgotten with online loans.
- Apply Anytime: It has always been frustrating to stand in lines at the branch waiting for your turn to come. Popular banks lose out on customers just because of the long queues in their branches every day. With online loans though you can apply anytime and from anywhere without having to wait for the branch to open or for the employee to finish his tea.
Disadvantages of Online Loans
With the advantages of online loans come a few disadvantages as well:
- Higher fees and rate of interest: Online loans are generally advisable only when the need of money is pressing. As compared to normal loans, online loans have much higher rate of interest and fees. Apart from the high interest rates you also have to pay money to apply for the loan. Moreover you need to pay a fee if you get late with the repayment. And these late fees tend to become really exorbitant with passing time.
Small Repayment Period: With normal loans the repayment period can be spread out over a comfortable year or two. But that is not the case with online loans. Most online lenders have very short repayment periods ranging from two weeks to up to 2 months.