What are the advantages of applying for online loans?
It wasn’t that long ago a loan applicant needed to go through a long and arduous process. Going into the bank or an independent provider was a daunting experience, but it was the start of a long journey.
Next was a lengthy form filling, the credit checks, and finally waiting for a decision that could take days. All that time, the applicant would feel anxious about the decision. Things are different now. You don’t always need to go into a bank or other traditional provider when looking for instant guarantor loans. There are many advantages to seeking online loans.
Convenience
The main reason people choose online loans over traditional bank loans is convenience. There is no need to visit the bank only to discover that you forgot a key form of ID or your glasses and can’t see the form or the screen. Neither will you need to take several trips or phone them only to hear that the decision is still pending. Nobody likes a wasted trip. When applying for loans online, all your information should already be to hand.
However, the convenience doesn’t end there. Decisions are also at your convenience. If you do not receive an instant decision, it will appear in your inbox when ready. No trips to the bank, no phone calls, just an alert on your phone or tablet.
Time saving
Mentioned in the last section, decisions are often much faster with online loans than they are with bank loans. On average, they take just a few minutes. In some cases, such as where more complicated checks might be needed on the guarantor, they can take a few hours, but no more. That is still much quicker than a bank loan which can potentially take days. In some cases, a traditional loan might take up to a month.
Online loan providers require fewer details than traditional banks and tend to ask for different information. This makes the decision faster and simpler. Quick decisions become critical when the money is needed for a major purchase, for example. Some loan applicants cannot wait days or even a week for a decision when the money is needed for a specific project.
Lower interest rates
Paying interest on a loan is a fact of life. No financial provider offers interest free loans. When searching for personal loans or any type of loan, most people will primarily consider the interest rates and payment terms. It’s natural to want to pay as little as possible on top of the loan value.
Traditional banks have other overheads that online providers do not. They employ more staff, have larger premises and so on. Therefore, they must charge higher rates of interest to cover their costs and ensure they make profit. The longer a credit check goes on, the more cost is added on. That’s why your bank loan will cost you more to pay back when considering a comparable loan with an online provider. Instant guarantor loan providers want a quick decision for you and for themselves. Why pay more for your loan when there is no need to do so?
High approval rates
Traditional banks provide many services other than guarantor loans. They offer mortgages, savings, current accounts and much more. They are not wholly reliant on loans which means they are less likely to offer you a loan, even if your financial situation is in good standing. They don’t need to consider you a financial risk to reject your application. Banks and other traditional lenders are generalists while online loan providers are specialists. They are not only more likely to grant your loan but will generally offer better terms.
For applicants with past financial difficulties, your chances of a bank loan are much lower today. Online providers are far more interested in your current situation, or that of your guarantor.
Accessibility for future services
If you have ever applied for another bank loan a year or two later, you will be asked to fill out the same information you filled out the first time. This is time consuming, not to mention frustrating that you must do it again. With an online loan provider, you’re essentially signing up for an account and your details are kept on record. All you need to do is log in with your details, update anything that needs updating, and apply again. You could have another loan within minutes.
Many people are drawn to online loan providers because of this convenience. The anticipation of a fast decision with the money appearing in your account in moments makes such loans a viable alternative option.
Alternative to online loans
When applying for a bank loan, the decision is a binary yes or no. You are unlikely to be approved for a portion of the value requested. Banks generally do not authorise partial loans, but online loan providers may offer this as an option. You are then free to find the remaining required funds from elsewhere – another provider or borrow, or from friends or family. This reduces the stress and anxiety of sourcing the money when refused a loan and provides a greater degree of flexibility for loan applicants.
