What are Online Loans?

What are Online Loans?

You may have heard of online loans and wondered what they are. It might sound like they are any loan that you can apply for online. However, they are not quite so straightforward as this. It is good to know exactly what it means and then you will know whether they are a suitable loan type for you.

What is it? – An online loan is a payday loan which you apply for online. This makes the application really easy as you do not have to fill out a paper form. This could cause delay in posting it and also is something which many people do not like doing. Filling in an online application for is not only easy, but it is also quick and online lenders make them as simple as possible.

How does it work? – once you apply for the loan, there will be very little time until you get the money that you need. Often online lenders will be able to get the money to you with a few hours of your completing the application form. This will depend on the lender that you choose though, so if you do need it really urgently then check first. Some may even be able to lend money to you outside of normal working hours such as at weekends and during evenings. The money will het put into your bank account so it will be there for you to spend, transfer or draw out as needed.

How do I repay? – the repayment of an online loan tends to be in one lump sum. This is usually repaid on the day that you get paid. Often the lender will set up a direct debit for this day so that the money goes out automatically. This not only means that you are unlikely to forget to repay but it also means that are more likely to have a large amount of money in the account. Usually, when we have just been paid, we have a lot of money available. 

How much does it cost? – loans all have different charges and this will depend on the lender as well as the type of loan. An online loan will often have two sets of charges. You will be charged interest and administration fees normally. To find out how much you get charged, it could therefore be complex to calculate. However, it is possible to find out in different ways. You may find that some online lenders will have a calculator on their website which will allow you to work out how much you will be charged. If you cannot find one or are not sure how to use it, you will be able to contact their customer services department who will work it out for you. If you miss the repayment, because you do not have enough money to cover it, then you will get additional charges and these will again differ between lenders.

Who is it for? – you may wonder whether this type of loan is for you. The loans were originally set up to help certain types of people, but there are no rules about who can take them out. Your credit record is not used to decide whether you will be lent money to and this means that even if you have been turned down for other loans, you may still be successful in getting this one. It was set up because there were no options for those with a poor credit record to borrow money. However, it is not necessary to have a poor credit record to borrow using this type of loan. The loans are organised quickly, which means that it could be the case that those who need money in an emergency might choose this type of loan so that they can get the money quickly, even if they have a good credit record.  

So, online loans are quite different to more traditional loans. This means that they may appeal to different people or provide a lending experience that is not available anywhere else. Even if you feel that they are not the right loan for you right now, it can be a good idea to get to know more about them as you never know whether you might need them in the future. We may think that we will always have a good credit record or that we will never need money in an emergency, but we never know what might happen in the future. Of course, it is lovely to think that we will always have the money that we need, when we need it, but sometimes this is just not the case and we need some extra financial help. Knowing what is available means that you are able to choose the loan which suits your needs the best.

Who has the Best Payday Loans?

Who has the Best Payday Loans?

If you are looking for any type of loan, then you will need to find the best lender. This will allow you to be able to then find the best loan, but it is not as easy as it seems. You may feel that it will be simple to just look at a few review websites or comparison sites and you will be able to work out which is the best. However, different people have different ideas about what makes a good loan and therefore you will generally find that there is no consistency with regards to what people feel makes a good loan and therefore there is no one lender that everyone feels is the best. This means that you will need to do your own research and find out for yourself. This can feel like a daunting task but it is not so bad if you have a methodical approach.

Decide what you need

You need to start off by thinking about what your needs are. You might not really know, but firstly you will need to think about how much money you need to borrow. You also need to think about how quickly you need the money. Some payday lenders will lend out more than others. Many will restrict first time borrowers and only allow them to borrow smaller amounts of money. This means that they might only allow you to borrow a few hundred pounds. Whether this is enough, will depend on what you need and you may find this varies between lenders so you will need to check.

Consider what you want to pay

All loans have costs and you need to think about these when you are deciding on them. The costs will vary between different loan types as well as between different lenders and it is a good idea to get familiar with the costs so that you can decide which you feel offers the best value for money. It is a good idea to consider whether you are prepared to pay a bit more for certain properties of loans. For example, some people will be happy to pay more if they can repay over a longer period of time and manage those repayments more easily. Think about whether there is anything that you are prepared to pay more money for or whether you just want to use the cheapest.

Work out what you can afford to repay

It is really important to work out exactly how much you will be able to afford to repay. You might feel that this is not really that important but actually it is one of the most important things that you should do. You need to think about the things that you normally pay for, particularly the essentials and items that you have to buy and whether you will also be able to afford a loan repayment as well. You should actually look at some figure from past bank statements and work this out. It is really important because if you do find that you cannot afford to repay, you will have to face extra charges and no one wants to pay extra.

Find a loan that matches

Once you have this information and you know how much you need to borrow, what you can afford to repay and what you are prepared to pay in fees, then you can start looking at the different loans and try to find a match. There are a lot to choose from, but whether you easily find something that will work for you, will depend on your requirements. To find a lender you will be able use a comparison website, a review website or a personal finance website but these may not include all lenders. Sometimes these sites are paid commission on leads they generate and will only include lenders that give them a generous amount of money. This means that some will be left out. There may also be some lenders that will only deal directly with customers and not use these sites. You may also want to look at a search engine search result too as this will include a bigger range of lenders and you will have a better chance of finding the perfect one for you. 

This could take some time but it will be worth it if it means that you get the right loan for you and get good value for money as a result. If you are in a hurry for the money it can be tempting to skip this, but it could mean that you end up with a loan that is unnecessarily expensive and does not properly meet your needs. So, it is well worth taking the time to do this, even if you rush and only spend a little time on each step.