Online Loans: Time to Ditch the Banks?
It seems everything from shopping to making doctor’s appointments is moving online. Banking is no exception, with most transactions now available online or via a banking app.
Loans can be obtained online too and, in some cases, the entire process is handled virtually.
With the number of online services offering loans on the rise, a fair number people are foregoing banks completely and going straight to online lenders. We take a look at the pros and cons.
The pros
Just because the process is handled online, it doesn’t make the lender any less legitimate. Here are some key advantages to securing a loan online.
Quicker approval
Often, approval for online loans is markedly faster than for bank loans, with fewer criteria considered and a less laborious approval process.
Better rates
Fees and other administrative costs are often lower for online loans. Due to the online nature of the business, overheads for the lender tend to be lower, and this may (although isn’t always) passed on as a saving for the borrower.
Unsecured or asset-based loans
Some online loans are either unsecured or are based on a valuable asset that you own. This means you can avoid the risk of your possessions being seized, your salary being garnished or your being blacklisted.
Convenience
It’s much simpler, faster and easier to apply online than to traipse down to the bank and stand in a queue to apply. Even your supporting documentation can generally be scanned and submitted online.
The cons
A lot of the online options for loans are essentially payday loans, which can carry very short repayment periods and heavy fees. Sometimes they even require upfront payments.
Ensure that you’re dealing with a reputable online lender by doing some research about the company beforehand.
Shorter repayment terms
Online loans are often short-term loans, which can carry high monthly instalments. You’ll need to ensure that you can afford the repayments on top of your usual monthly expenses.
Higher interest
Despite the lower fees involved, online loans do tend to have higher interest rates applied. Online loan providers are typically smaller institutions and can’t compete with a large banks’ interest rates.
Verdict
Online loans are quick and convenient for short-term loans that you intend to pay back fairly quickly. They’re also a good option for people who don’t have healthy credit scores or who want loan options that won’t affect their credit rating.
As long as you do some comparative research and find a reputable lender with competitive rates, online loans can be a much simpler and quicker way to secure the money you need.
Online Loans with Pawn My Car
Pawn My Car offers quick, convenient short-term loans against the value of fully paid up vehicles, with no credit checks or lengthy application process.
With a loan from Pawn My Car, you retain ownership of your vehicle, and you can rest assured that it will be returned to you once the loan and agreed interest are repaid.
Pawn My Car offers competitive rates and complies with the terms of the National Credit Act. For more information, contact us on 086 172 9648 or simply complete and submit our online application form.
