With everything going online these days, money lending companies are not behind. Many companies have started businesses where they approve applications and lend money online. Although there are many advantages on getting a loan online, some problems are also attached with this type of loaning option. One must learn more about online lenders before making any decision.
Pros of online lending:
- Faster and time saving process:
Online lending is a very time saving process as compared to the traditional loaning procedure. There are no lengthy documentations involved and no red tape is there. You apply for the loan online and get your application approved within a few hours. So, this makes this process faster as compared to the usual loaning process where you travel to reach the loaning facility and complete a lot of documents to get the approval.
- Low interest rates:
Online lenders offer lower interest rates as compared to the conventional lending companies. This makes the loan cheap and many people find it more beneficial when they compare the total cost of borrowing money.
- No cross selling:
This feature can both be the advantage and disadvantage of online lending depending upon the person using this form of loan. Some people do not want to waste their time and energy with the salesmen sitting in the loaning companies selling insurance policies or convincing them to opening an account with the company and handing over their money to them. They just need their loan to be approved and get off with it. So, online loaning will be a kind of blessing for such people where they do not need to meet such people and listen to their offerings.
Everyone will prefer this option due to the less costs involved in terms of travelling and the money included but like every other thing, online lending also has its limitations.
Cons of online loaning:
- No personal interaction:
In online lending, you fill the application online and get it approved then and there. There is no personal interaction involved of any kind. This can be a demerit due to which some people may avoid it. Some people like to meet real people, discuss their situation with them and want them to give the best solution to their problem. As online lending is comparatively new, some people simply do not trust online lenders.
- Lenders with doubtful repute:
Sometimes, it becomes very difficult to judge whether the lender you are dealing with is real or just a fraud. Before choosing one, learn more about online lenders, read everything about them, select the one that has good reputation.
- Approval fees:
Online lenders usually charge some fees for loan approvals. So if you are going to get a loan online, get ready to pay this additional fee.
- Sharing personal information:
When you apply for the loan, you are sharing a lot of personal information with them like your earning, information about your employer, your assets and a lot more. So, consider well before selecting one.