Do you have an emergency that requires a quick solution? An online loan could come to your rescue. Online lenders are companies that are specialize in offering credit facilities to people who are in quick need of money. Online lenders normally do not have to rely on the credit scores of the borrowers before they offer them loans. As such, any emergency that requires a quick financial fix can be solved through online loan facilities.
There are many advantages and disadvantages that come with borrowing money online. One of the good things about online lenders is that one does not have to visit a physical financial institution to receive money. You can get your money from online lenders in a matter of days. As such, before you decide to borrow a loan from an online lender, you need to review the many pros and cons that come with these lenders. Once you have the right information, it is easy for you to decide to either borrow from online lenders or choose physical financial institutions for the loan.
In this article, we shall consider the advantages and disadvantages of online lenders. Here are the pros and cons of getting an emergency loan online:
Advantages of getting an emergency online loan
1. Great rates and terms
This is one of the advantages of online lenders. They can offer you online emergency loans at great rates and sometimes they have better terms and conditions for repaying the loans. Therefore, when you have an emergency or you need to consolidate other loans, an online lender can come to your rescue. The fact that online lenders save on some expenses such as rent payments gives them headroom to offer you lower rates. However, you should not make this assumption and borrow from any lenders online. Review their terms and conditions before you make a decision.
2. Easily compare offers from various online lenders
This is another advantage of online emergency loans. It is easy for you to compare the various online lenders before you take their emergency loans. When you apply for preapproval from various online lenders, it becomes easy for you to get the estimates of the amounts you qualify for, the rates of repayment as well as the terms and conditions of the loan. This way, you have a better understanding of the various online lenders and their advantages.
3. Faster Processing of the loan
The fact that you are borrowing an emergency loan means you need it quickly. This is one of the reasons online lenders thrive. Online lenders can even process your loan in minutes. Some apps can process loans in a shorter time. Most emergency online lenders can take from 15 to 20 minutes to process your loan. The loan is then approved in a matter of hours. This, therefore, makes online lenders more suitable when compared to traditional lenders.
4. Flexible reasons are allowed by the lenders
This is yet another advantage of online lenders. You can take loans from these lenders and give any reason that seems tenable to you. You need not specify any details about the use of the loan. The fact that you will not need documentation for the loans means that you can have it processed and deposited into your account in record time. This flexibility makes online emergency loans good for you.
Disadvantages of getting emergency loans online
1. No loan if you have a poor credit record
Some online lenders will not approve your loan if you have a poor credit score. The same case will apply to those without a low debt-to-income ratio. For this reason, some people prefer to take loans from their banks or credit unions.
2. Lenders may continue to contact you
When starting the loan application procedures with many online lenders, they will contact you multiple times. The same case applies even to those who use aggregators to check their loan suitability. The many emails, SMSs, messages, and calls may be endless. This could be a stressful thing for you to encounter.
3. You can only manage the loan online
In the same manner that you applied for the loan online, you will have to manage it in the same way. You will need to repay your loan online. Any queries or issues that arise from the loan will have to be sorted out online. Any problems will have to be sorted out through emails, or online chat, unlike branch-based loans where you can visit and have a sit-down consultation with a bank officer.