There are two methods for obtaining a loan. The traditional approach involves walking into a bank or financial institution, speaking with a representative, deciding on the product you want to use, and applying for a specific loan.
The other approach, which is becoming more popular in today’s world, is more technologically advanced and extremely convenient. This method is to apply for a loan online. Here, you research loan products on your laptop or phone, learn about legitimate and trustworthy companies that provide such products, compare loan terms among different vendors, and then make an informed decision about which lender and loan to target.
Understanding How the Online Loans Work
Here’s a quick rundown of how online loans work: most lenders will require you to complete an application that includes personal information such as your name, address, employment history, and income. Once you’ve submitted your application, the lender will review your information and decide whether or not to approve your loan. If your loan is approved, the money will be deposited into your bank account typically within 24 hours.
Before taking out an online loan, it’s important to research and ensure you understand the terms and conditions of the loan.
Advantages of an Online Personal Loan
1. Low Salary / Income Requirement
While many lenders require a minimum income level in order to qualify for a personal loan, there are some lenders who will consider your application even if you have a low income. This means that even if your salary is on the lower end, you may still be able to get approved for a personal loan.
In addition, when you apply for these online low-salary loans you don’t need to provide collateral, such as a car or home, to get the loan. This can be helpful if you do not own any property or have a limited amount of equity in your home.
2. No-Contact Loans
In the current climate, many people are looking for no-contact loans – and an online personal loan is a perfect solution. Here are some of the advantages of applying for a loan online:
1. You can apply for a loan from the comfort of your own home.
2. There’s no need to visit a branch or meet with a loan officer in person.
3. You can compare rates and terms from multiple lenders without leaving your couch.
4. Applying for a loan online is quick and easy – you can usually get approved in minutes.
5. Online lenders often have more flexible eligibility requirements than traditional banks.
6. You can get your money fast – most online lenders deposit funds directly into your bank account within 24 hours or less.
3. Flexible Loan Amounts and Loan Tenures
There are many reasons to take out a personal loan, but two of the most popular reasons are for the flexible loan amounts and loan terms that online lenders offer.
Borrowers can typically choose how much they want to borrow, up to the lender’s maximum limit. And, they can often select the repayment period that best suits their needs. This can be helpful if you need a larger loan amount and want to spread out the payments over a longer period of time. Or, if you need a smaller amount and can afford to repay it more quickly, you can do that as well.
4. Easy Application Process
Applying for a personal loan online is a simple and straightforward process. You can do it from the comfort of your own home with just a few clicks of a mouse. There is no need to take time out of your busy schedule to visit a bank or other lending institution. You also don’t have to go through the hassle of printing your physical documents since most of these websites accept everything digitally.
5. Available Even on a Low Credit Score
One advantage of an online personal loan is that it can be obtained even if you have a low credit score. This is because online lenders often use alternative methods to assess your creditworthiness, such as looking at your income and employment history.
6.No Prepayment Penalty
If you’re considering taking out an online personal loan, you may wonder if there’s a prepayment penalty. The good news is that most online lenders don’t charge a penalty for prepaying your loan.
That means that if you want to pay off your loan early, you won’t have to pay any extra fees. That’s good news for borrowers who are looking to save on interest by paying off their loans as quickly as possible.
Many people believe that the only way to acquire a loan is from the bank. However, this is not true. As a matter of fact, there are quite a few advantages that people enjoy when they are able to acquire an online personal loan over a bank loan. We hope that this article has provided you with some useful information on the advantages of an online personal loan over a bank loan.
Shikha Ahuja is part of the content marketing team at KreditBee, which is India’s fastest loan-lending platform that offers personal loan to individuals. Professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Shikha writes to create awareness amongst her readers on topics related to loans, personal finance, and budgeting. Being a part of the FinTech industry keeps her on her toes, but she keeps herself grounded through yoga and meditation, and loves to host game nights during the weekends.