Benefits of Online Cash Loans
Since the day banks introduced online banking, millions of people are thanking this service for saving a lot of time and energy. Online banking has made transactions easier, making life simpler. To add to it, online loans are now available. This is a much faster alternative to conventional bank loans and is preferred for a number of reasons.
- Faster Process
A real-time operating algorithm provides a hassle-free verification of the documents and whether the client is eligible for an online loan. There is also no paperwork involve which further saves the time, as compared to normal bank where the process takes weeks to months!
- Lesser Interests
If you do a good research, you’ll be able to find online lenders offering loans at lower interest rates than the banks. The online lenders are also notorious for lesser fee than the normal banks.
- Lesser Rejection
Conventional banks rarely give loans for a new business especially if it’s a small one and you don’t have previous experience in the field. Online cash loans, on the other hand, are available for people starting small business. All they need is a good credit record.
If you fail to repay the loan due to some reason, a normal bank takes away your assets. Online lenders do not put your assets on the stake. If you fail to repay the loan, you’ll get reduced credit scores.
How do you Borrow
Getting a loan online is very much similar to getting loan from a normal bank, the only difference is faster procedure. You need to give all your personal details to online lender. It will just take a second to be done with personal details. You will also be required to show your financial position. As soon as you are done giving details, the system will tell you about your acceptance for loan request.
Characteristics of Online Payday Loans
One category of online cash loans is payday loans. You need to be careful about these loans. They are high-cost short-term loans that can leave you in great debt. You can recognize these loans from the following characteristics.
- Short term; as mentioned, they are very short termed so they need to be paid within a month or so
- High interest; they are considerably more expensive than other available loan, bank or online.
- No Credit Check; these money lenders will not check your credit which is a clear sign that they’ll be looting you in the name of loan. Giving loan without checking credit is nothing but a gamble and they’ll be expecting a good return if they’re playing this gamble.
- Upfront charges; this is another characteristic of payday loans.
Avoiding Payday Loan scams
With the growing technology, the crime rate is also increasing and one main reason behind this is the awareness of thieves with the technology. This puts online loans on a risk, but that doesn’t mean you should just quit considering online cash loans, it simply means you need to be careful about some facts that are notorious for scams.
- Avoid going for fax-less online loans. While this may be attractive, getting an anonymous loan, but keep in mind that you’re dealing without any record in hard form so in case of an issue, you have no documents to show.
- If the lender does not ask for a credit score check, it’s most likely a scam. As mentioned before, such lenders are in for a gamble of money so chances are, they’re going to take huge sum of money from you in the name of interest.
- Carefully read the details of the agreement. While the interest may be reasonable, many lenders trap you into paying huge sum in the name of fees and other charges. Be where of such hidden charges.
- You should be able to locate the sender. Despite the fact that the company offers loans online, you should be able to locate their office, in case of any trouble.
Why Payday is not a good option
Summing it all, online loans are a great convenience and a hope for small business owners. Still, one needs to be careful about the lender. Following are the 3main reasons why one shouldn’t go for a payday loan.
- High interest rate
- High Upfront charges
- Prepayment penalties