Personal loans are a great way to consolidate high-interest debt, finance a home improvement project, pay for an upcoming vacation or take care of emergency expenses. You can use these loans, also commonly referred to as Insta Loans, to do just about anything when experiencing financial difficulty. The best thing about personal loans is that they’re classified as unsecured loans, so you don’t need collateral to be approved.
Typically, lenders first make sure to assess the potential risk by considering a borrower’s credit score, income, and history of debt repayment. If approved, the lender extends credit at an agreed-upon rate and term length. But this isn’t necessarily the procedure with an online personal loan, where you can qualify for a loan even if you have no credit history or have a poor credit rating. Below are advantages you’ll enjoy when applying for a personal loan online.
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No Collateral Needed
You don’t have to offer property or any other valuable asset as collateral when applying for an online personal loan. These loans are usually unsecured, meaning they don’t require collateral to be approved. Generally, most lenders will only ask some basic questions before approving your loan application. This means that your home, car, or other valuable property won’t be at risk in the unfortunate event you miss paying repayment or default on the loan.
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Faster Approval Time
Approval for a personal loan online is faster than the traditional loan application process, which often takes days or a couple of weeks. All you’re required to do is complete your application so that your information starts being processed immediately. This means you don’t have to wait several days, as is often so when applying for a loan through a traditional bank. Instead, your loan approval takes a couple of minutes or hours, and you’ll have the funds deposited into your account within one business day.
Online personal loans are processed much faster because processing is done by computer software. As a result, this streamlines this whole process, saving both effort and time. But for optimal processing speed, make sure that you submit all the required documents since they’ll be verified digitally. With personal loans online, you also don’t have to worry about late approvals or problems during payment processing, which is often the case when borrowing from a traditional lender.
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Convenience
One of the main advantages of applying for a personal loan online is that you can do it from the comfort of your own home. You don’t need to schedule an appointment or visit a branch and wait in line to speak with a loan officer. Instead, you simply need a smartphone or laptop, a few documents, internet connection, and you’re good to go.
You simply need to head to the lender’s website and enter your personal details on the loan application form during the loan application process. You’ll also need to upload a few documents, including your bank statements, a picture of your ID, payslips, to name a few. Consequently, the lender will review your loan application and documents to determine your eligibility. When applying for personal loans online, this convenience also motivates you to shop around for the best online personal loan rates to find the lower interest rates.
With personal loans online, you can conveniently track the progress of your loan. All you need is the loan application number, which can be used later after getting the loan to find out details such as your interest rate, outstanding balance, and tenure. This information is usually passed across to you through SMS, email, or both. You’ll also be notified during your entire loan period if you’ve missed any repayment.
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Lower Interest Rates
Another advantage of getting an online personal loan is that it allows you to get better rates and terms than what you would get from a traditional lender. In most cases, traditional lenders will offer different terms and rates depending on your credit score. If your credit score is less than average, you may find it hard to secure a good deal with most lenders. In contrast, online personal loan providers charge you an interest rate depending on your financial standing. As a result, you end up getting better rates and terms.
Online personal loan lenders also tend to offer better rates because they have fewer overhead costs than brick-and-mortar institutions do. Thanks to this, your cost of borrowing will typically be lower with an online lender than with a bank or credit union, even after taking into account any application fees charged by the lender. In addition, the interest rates for online personal loans with flexible terms are lower because some online lenders allow you to choose your repayment terms, thereby reducing interest rates if you opt for more extended periods.
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