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Getting a loan from a bank or other institutions can take some time before getting approved. If you are in need of fast cash, you can consider getting an online loan application. Now you will not need to wait for a week or a month’s time to get approval for your required loan.
It may seem like online loans are a great way to get money fast. However, along with the many advantages, there are downsides as well. So what are the advantages and disadvantages of an online loan?
Benefit
Let us first look at the benefits that you can avail on availing this type of loan.
1. Easy Approval – Getting approval is much easier as compared to other types of loans. Online lenders often have low criteria that you can easily meet to get approved. This may include having a steady source of income, a bank account and being of legal age.
Even if you have bad credit, there are online lenders that offer online loan services that are tailored to your needs. If you apply for a loan from a bank with a negative credit rating, your application will most likely be rejected.
2. Less Hassle – The tiring part while applying for loans from banks and other institutions is the paper work that you have to submit and fax to them. You need to submit the correct certificates to get the loan approval. However, when you apply for a loan online, you do not have to go through the same tedious tasks. All you have to do is fill an online form and you are done.
Now you do not need to stand in line or travel personally to the bank or other institutions to apply for the loan. This saves you both time and energy, as you can do it from the comfort of your home at your computer.
Harm
While there are many advantages that can make online loan application very attractive, there are also disadvantages.
1. High Fees and Interest Rates – Professionals would advise you not to take this loan unless absolutely necessary. Online loans have higher interest rates and fees as compared to normal loans.
Apart from the high interest rates and fees that you have to pay while applying online. You will also have to pay a fee for late payment. Late repayment fees that are charged by most online lenders can reach up to double or triple the amount you have borrowed.
2. Shorter repayment schedule – Normal loans from banks and other institutions can give you a repayment plan that divides your loan payments over a longer period. A normal loan can be repaid within a year or two. However, an online loan requires you to settle your loan within a short span of time. This can happen within two weeks or a few months.
3. Unclear terms and condition details – In some loan services, there may be certain terms and conditions that put you in a high-risk situation. This is often intentionally hidden or made obscure, because they don’t want you to know about it.
While useful, there are a few things that need to be taken care of before availing an online loan application. You should always weigh the pros and cons before deciding anything.
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