The needs and wants of people are increasing every day. To finance costly needs or even desires, one can take a loan. These days, applying for a loan has become quite simple. One can do the process of application both online and offline.
The concept of online loans is straightforward. A potential borrower can apply for the loan without having to go directly to the bank or financial agency. One needs to fulfil the criteria and prepare the documents required for a personal loan. This process allows the application to get prequalified by many lenders. The borrower also does not have to face credit enquiry, adversely affecting their credit score. They can also avail of a few relaxations if they choose to apply for the loan online.
Pros and Cons of Online Loans
- One can easily compare loans.
Unlike the conventional method of comparing loans, the online method is relatively easy. The terms of loans offered by various lenders can be compared fast. It allows one to have the most relevant loan term at a reasonable rate.
Loans are sorted depending on the desired amount and financial suitability of the borrower. When applying for a personal loan online, one can use an EMI calculator to see how much their monthly EMI would be.
- The application process is hassle-free.
The entire process of paperwork is eliminated in the online loan application. One needs to fill out the form digitally.
Documents required for a personal loan or any other loan can be uploaded online. This facility allows a person to do the entire process at their convenient time and place. It is both time-saving and environmentally friendly as it does not use paper. Managing and finding data digitally is relatively simple rather to manually. Hence, the online procedure helps the lenders too.
- Coming to a decision can be easy.
The wait time is longer if a person decides to go for the traditional method. Once a person applies for the loan, they must wait a few days before the bank or the lender gets back to them. Hence, they know their eligibility late and must keep waiting to get the loan approved.
If a person applies for a personal loan online, the wait time is less. When the application for the loan is received, the eligibility check is done immediately. The applicant gets to see whether their file will be forwarded further.
- The process of approval is faster.
The entire loan application process is digitalized. One must fill out the application and upload the documents required for a personal loan. The disbursement is also quicker. The process is so short that the applicant can receive their money the same day or the next business day after completing the application.
- Some lenders might be a bit difficult to trust.
Online lenders often require a physical presence for the borrower. Also, there are plenty of cases of people getting scammed while trying to get loans online. People wonder how genuine a lender is.
Before applying for a personal loan, it is always advisable to do proper research. It is wise to have detailed information about a lender before making a deal.
- There might be hidden terms and conditions.
When the application is filled out online, the documents required for a personal loan are also uploaded digitally. Sometimes, lenders impose hidden terms and conditions on unsuspecting borrowers.
It is the duty of the person applying for a loan to read the fine print of the legal documents before signing them. Many people miss this part while applying for a loan online. Later, when they learn about hidden terms and charges, it becomes a problem for them.
How to find a good and trustworthy lender?
- The RBI can tell if a lender is legit.
- Asking friends and family about trustworthy agencies is a good idea.
- If in doubt, one can always do a bit of research on the lender online.
Which behaviour by the lender should be considered suspicious?
- A lender will never pressure a person to apply for a loan. There is a difference between healthy advertisements and pressurizing potential borrowers.
- A reliable lender will put up their information on their website. If one does not, it is best to avoid them.
- The lender asks one to apply for the loan and guarantees approval, although the credit score of the borrower is not too good.
- They will demand an upfront payment to be made by the person.
- The lender reaches out to a person via calls, texts, emails, or unusual methods.
- The lender continues to reach out to the person even after they have declined the offer.
This article has discussed the points to consider when someone decides to get a loan online. Applying for a personal loan online is easy. If a person has completed the process of filling out the form and uploading the documents, they will not have to wait to get the loan amount. Their verification and approval of online loan applications are quick.
Piramal Finance is a good option if you are looking for a trustworthy financial agency. You can also visit their blog page to read more such informational posts.