The internet makes it easy to do just about anything – including applying for loans. Before banks began operating online, loan shopping was a cumbersome process. You had to visit each bank to inquire about their loan offerings and eligibility requirements. No more of that.
The first thing you need to do is figure out the type of loan you need. Since many banks only offer loans for certain purposes, knowing the type of loan you need might limit the banks to which you can apply. Some common types of loans include auto loans, student loans, and personal loans.
Online loan requirements will vary depending on the bank offering the loan and the type of loan you are requesting. Generally, lenders have minimum income and credit score requirements. You might also be asked to secure the loan with a piece of collateral.
Most online lenders will not extend a loan to you if you have outstanding debts. It’s a good idea to get caught up on any charged-off accounts or accounts that have been sent to collections.
If you do not meet the minimum requirements you may be required to have a co-signer guarantee the loan.
Advantages Of Online Loans
One of the best things about online loans is the convenience of making the application. You can easily make an online loan application from the comfort of your own home. This makes rate shopping easier, too. Rather than having to drive from one bank to the next, you can move from one lender’s website to another’s with minimal effort.
Approval for online loans can be obtained within a matter of seconds. Many lenders are able to accept or deny your application almost as soon as you make it. If you’re afraid your application might be denied, you can deal with the disappointment in your home, instead of being forced to contain your emotions.
Disadvantages Of Online Loans
There is no person to negotiate with or explain a situation to. You can’t bargain with a computer. Neither can you explain away that unpaid medical bill from six years ago. If your online application is denied, there’s not much you can do about it. When you make an application in person, you have the luxury of being able to communicate with a person.
With online loans, there’s a greater risk of fraud and identity theft. In the offline world, it’s a lot easier to spot a scam or loan shark. The same isn’t true for online lenders. You have to take extra precaution to keep your personal information safe when dealing with an online lender.
Top Online Lenders
Eloan.com is arguably one of the largest online lenders. Their loan offerings include auto loans, student loans, mortgages, business loans, motorcycle loans, and boat loans.
Several offline lenders also provide loan services online including BankofAmerica.com and JPMorganChase.com.
When you’re choosing an online lender, check that lenders reputation and look for consumer reviews, both good and bad. Reading other consumers’ experiences will give you a good idea about the reputation of bank and help you make a wise decision about an online lender.