Private lenders are gaining popularity nowadays. Why? because they offer cash assistance that can be approved in just a minute. They don’t require too many requirements unlike when you apply for a loan in a bank. It is very convenient since they will only require you to fill up an application form and submit at least one proof of identity. However, you must be aware that apply for a loan online has a downside as well. If you want to know what are the advantages and disadvantages of an online loan this might help you.
Familiarizing yourself with the advantages and disadvantages of online loans will help a lot. It will help you decide whether to borrow money or not. In addition, you must be very careful when applying for a loan online, make sure the private lender is a legit one.
Here’s the Advantages and Disadvantages of Online Loan:
Advantages of Online Loan
Available 24 hours a day, 7 days a week
If you wanted to apply for an online loan, you can do it anytime you prefer since most of the private lenders are open 24/7. Just visit their website or application then inquire.
It doesn’t if you’re unemployed or employed and with or without a credit history. Since they don’t ask too many requirements, it is easier for them to approve the loan.
The good thing about private lenders is that they don’t require too many requirements. As long as you have one valid ID that was issued by the government, then you’re good to go.
Convenient Application Process
An online loan is very convenient. As long as you have a mobile phone and an internet connection, you can apply anytime you prefer.
Bank Account is not Required
Most loan providers are asking bank account as a requirement when applying for a loan, but if you apply for the loan from a private lender, they don’t usually ask for a bank account.
Disadvantages of Online Loan
High Interest Rates
It might be convenient and easy to approve. But, do note that fast approval loans usually come with high interest rates.
Risk of Being Harrassed by Private Lenders
If you aren’t able to pay on time, they usually do debt-shaming to pressure you on paying your debt which might cause you distress.
Short Loan Amortization Terms
Most of the private lenders online are giving at least 30 days to settle your debt. You can ask for longer-term a but expect a higher interest rate.
Higher Chance of Getting Scammed
Since this type of loan is processed online, there’s a chance that you might be communicating with a scammer. So be very vigilant, conduct research first about the legit private lenders so you don’t get scammed.
As a final point, we will all come to the time of our lives where we will need money for emergency and online loans is one of the options available. However, be very vigilant. Make sure that the loan provider you’re applying for is a legit one. Conducting research is a must.