Do you have a pressing need or an emergency, you need to take care of? If you do, then you know online and traditional lenders are your best options. In the recent past, the American appetite for loans has grown to record-breaking levels, hence the rise of online lenders to take care of the growing demand.
However, this hasn’t come without its fair share of criticism and, worst of all, misinformation about the new industry players. Knowledge is power, and it is vital for any borrower to understand the truth about online lenders so that they don’t miss out on borrowing opportunities.
1) Applying for Online Loans Is an Uphill Task
Every invention made by man had a single purpose: To make life easier. That is exactly what the internet sought to accomplish when it was first launched. It allowed people to communicate easily, and the platforms involved are just as easy to use.
Filling out the online forms, while applying for a loan is as easy as it gets. Think about the numerous pages of paper you have to flip over. Then you have to get to a physical office to submit your papers.
With online applications, depending on the type of loan, you’ll take less than seven minutes. On top of that, you can complete this process from the comfort of your home using your smartphone.
2) You Need Stellar Credit for Approval
This is probably the most peddled myth in the world of lending. While having a good credit score will help you land better loan terms and interest rates, it doesn’t mean you can’t get a loan with a poor one. The only problem will be the high-interest rates.
In addition, most lenders don’t take a keen interest in your score to get you approved for a loan. All they need is proof of repayment. This can be a stable income or a co-signer to help you out in case you get stuck along the way.
In fact, lenders take a look at other factors besides the credit score to determine whether you qualify for a loan.
Most lenders will report to a number of credit reporting agencies, which can in turn boost your credit score, so be sure to make on-time payments.
3) Online Loans Take Forever
When shopping around for a loan, the most important factor borrowers look out for is the duration before approval. This is from the time of filling out the forms to the disbursement of funds. One of the most common misconceptions about online loans is that they take forever to get approved.
Well, this myth is about to be put to rest. In reality, it is not true. As a matter of fact, online loans are among the fastest in terms of approval. If all your details are correct, and you have a good credit score, it shouldn’t take you more than 48 hours to receive your funds. Some even take 24 hours.
Conventional lending, through banks, can take you well over a week to 45 days to process and approve your loan.
4) Online Lenders Have A Poor Customer Care
After trying out all available hacks, you turn to customer care to salvage the situation. This happens to everyone regardless of the industry. However, calling customer service can turn out to be a fruitless endeavor for some companies. You’re put on-hold or worse yet, a robot chat you up with unending advertising. By the time you get a hold of a human, you’ve figured out a solution.
This is not the case when it comes to online lending. There are numerous representatives waiting to pick your call and help you out with any queries you might have.
5) All Lenders Are Similar
This is simply wrong. Just like banks have different operating terms, so do online lenders. Some offer favorable interests while others use different techniques to qualify borrowers.
To get the best deals from the sea of online lenders available, it is important for you to do your research by reading reviews, comparing privacy policies, terms, and rates, as well as checking the lender’s performance score with the Better Business Bureau. Beware of predatory lenders and others that ask for fees up-front. A good online lender’s finding service which find reliable options for personal , installment loans over this website : https://www.realisticloans.com/installment-loans . These matching services are the best option to save time for research and finding a trusted nearest lender.
After conducting your research, pick a lender that suits you and apply for a loan of your choice.
6) Online Lenders Are Scammers
There’s always going to be a rotten apple in the lot. The case is no different in the lending industry. There are a number of predatory lenders waiting to pounce on uneducated borrowers with no idea what they are doing. As a result, the borrower is left with a bad taste in his mouth vowing never to get close to an online lender.
However, the truth is these lenders are the minority, and they are doing a good job of staining the market for another decent lender. Another reason why borrowers shy away from online lenders is the high rates.
The high rates you see on their websites are set aside for the borrowers they deem risky, those with poor credit scores.
7) Online Lenders Are Unregulated
Not true. The Fair Credit Reporting Act regulates online lenders, and they are required to follow all other laws during any transaction. One of the laws states that lenders cannot deny loans to people based on religion, gender, or race.
What’s more, the law has set a cap to the interest rates which the lenders cannot go above when issuing loans.
8) Computers Have the Final Say
Some do. However, a number of lenders use both subjective and objective factors to determine whether you qualify for a loan or not. Some even interviews the borrower over the phone instead of using cold-hearted algorithms to decide your eligibility.
9) Asking for Too Much Money Is a Put Off
No, you will not be turned down if you ask for a huge loan amount. Lenders analyze your credit history and other financial details to come up with a suitable loan amount they feel you can repay. As a result, they may scale down the loan amount from what you had requested.
Conclusion
The market for consumer loans continues to grow, and so is the lending industry. Although more Americans are taking out more loans than before, a significant number continues to shy away from these lenders due to misinformation.
