Online loans have only recently become prominent in the financial market, but people have been positively receptive to this new addition. With a new normal sparking significant changes in everyday life, you’ll have to turn to the digital sphere to make even some of the most important money decisions. Banks and financial institutions now offer various loans with a completely online application process, from short-term to personal and business loans.
While online loans are very straightforward and easy to apply for, there are a couple of things you can do to expedite the process and ensure that you’re making the right decision every step of the way. Here are a couple of tips to you need to know.
Consider The Urgency Of Need
The biggest disadvantage of traditional loans is that they aren’t meant for urgent financial concerns. You know the drill–get a high enough credit score, clear up your history, go to the bank to inquire about a loan, try your luck at applying, wait weeks for feedback, only to find out that you’ve been rejected. The loop of inconvenience doesn’t end there: with every failed application, you lose an opportunity to speed up your application the next time you try. When you’re strapped for cash with a looming deadline to pay the deposit for a new home or car, or are faced with a grave emergency, it can be disheartening to know that a loan is weeks or months away.
Online loans eliminate the concern of a long-winding application process. Most financial institutions allow you to complete an online loan application in three easy steps: fill out the form, attach documents, and wait for the approval. Even so, each company promises a varying timeline depending on the type of loan and value that you’re looking to get.
Therefore, before jumping into an online loan application, look into the moneylender you’d like to borrow from and get an estimated timeline for the entire process. You may want to get in touch with their financial advisors to see if COVID-19 measures will cause any delays to the usual turnaround time. Time is ticking, and deadlines are right around the corner, so don’t stress yourself out further by ensuring that you can get feedback on your online loan application at an optimum period.
Online Loans Require Online Management
Some people aren’t comfortable with the idea of digital banking because they don’t trust themselves to manage an online bank account responsibly. The same goes for online loans. Most financial institutions don’t have a main office where you can talk to someone face-to-face in case of problems. By jumping into an online loan arrangement, you should be comfortable resolving issues through phone, chat, or email.
Loan statements and updates are usually sent through formal channels such as emails, and sometimes a text reminder to ensure that you see the message. You’ll need to commit to staying on track with your email accounts and text messages so you don’t miss a deadline and can provide any missing documents to speed up the application process.
Moreover, you’ll have to apply for online loans with a smartphone or a computer. If you don’t think that you’re tech-savvy enough to work around these nuances as of yet, then an online loan might not be the best idea for you.
It Doesn’t Hurt To Shop Around
The playing field for online loans is more competitive than you may think. Moneylenders offer compelling interest rates and promos to attract clients, so it doesn’t hurt to shop around before deciding to apply. There are a couple of important points you need to consider before settling for a financial institution:
- Interest Rate–choose the best rate you can get while considering all other conditions.
- Tenure–if the interest rate is low, but the tenure is too short for you to afford the full repayment on time, then scrap the idea and opt for a moneylender that can space out the payments. Remember: repayment habits reflect on your credit history, even for an online loan.
- Speed–if you’re racing against time to pay off an emergency expense, then look into online loans that can approve your application and release the funds within 24 hours. These are usually small value short-term loans, but if you need more money on short notice, then you can try opting for multiple applications. But ensure that you can manage multiple loans and pay them off on time.
- Coverage–if you’re looking to fund a very specific expense, such as machinery for your business or tuition fees for medical school, then consider looking into an online loan that can cater to these specific needs. They’re usually customized with the borrower and loan value in mind, so you can usually get a better deal compared to a general personal loan.
As with any other major expense, shopping around can save you plenty of time and money, so make sure to do your research. GoBear has plenty of resources, from comparison tools to blog posts, to help you make a decision.
Calculate The Total Loan Value
The total cost of a loan is beyond the loan value and padded interest rate–there are other extra payments you need to consider, such as processing fees, taxes, and more. However, the extent of these complications depends entirely on how much you’re trying to borrow. Any quick loans that amount to under P50,000 have it easy: you usually only have to pay a processing fee on top of the loan repayment and interest rate. Meanwhile, business loans and personal loans valued at P250,000 and above usually come with extra taxes.
Regardless, be informed of all the extra government and company-imposed fees. The value can add up, so check the moneylender’s website or get in touch with them to be extra sure.
Don’t Forget To Sign The Contract
Applying for online loans is so easy that many forget about the follow-on emails that come after hitting the “submit” button. For instance, if you missed a document or submitted an invalid file, then the moneylender will likely get in touch with you to resolve the issue. The same goes for accepted applications.
Financial institutions will send an email containing the contract and terms and conditions, detailing all the nuances to your online loan. It’s best to read through everything in detail and raise any questions or concerns before signing the agreement. Doing so will help you protect yourself against any previously undisclosed charges or future conflicts involving the contract. It’s also best to complete this step in a reasonable time so that the moneylender can complete the application process and release the funds.
Applying for online loans isn’t complicated at all, but it doesn’t mean that you shouldn’t protect yourself in the process. Get the best loan terms, be extra sure about your decision to apply online, and fund your dreams.