Internet-mediated loans have been with us for several years. Permanent clients of many financial institutions use them more and more often. A few years back, each customer was forced to visit the bank’s branch office to provide any service. With the advent of the Internet, much has changed in all sectors. Now only a computer and/or a smart mobile device with an Internet connection can handle the loan application. An online loan has become a phenomenon for anyone who needs money right away without a long wait. Long paperwork has also been dropped, credit agreements are much more understandable and shorter. All forms can be confirmed by an online signature.
How to choose an online loan and not get burned
Whether you’re looking for a bank loan or a non-bank loan, never rush to sign a contract. Many borrowers later find that their new loan is overpriced and then hard to find any consolidation. Be the first to do market research on multiple websites and also to review each loan review. This will give you a better overview and possible loan selection will not be so difficult for you.
After selecting the right provider, you need to set the parameters of the online loan. The required amount must be distributed so that you are able to repay the loan without any problems. Get advice and do not exclude the possibility of insurance against loss of employment. You may pay more, but you will be covered in case you are taken aback by a dismissal or a serious injury. Do not forget to find out the APR and interest rates. Under what conditions can the loan be repaid early?
Online loan and its terms
Of course, the conditions vary from company to company, but the minimum requirements are:
- at least 18 years of age
- identity card + second identity document
- mobile phone
- Bank account
- bank account statement for the last 2-3 months
- employees must provide proof of income
- Self – employed tax return
Benefits of an online loan
- processing speed
- Money available in minutes
- Easy loan management
- possibility of early repayment
Cons of online loan
- for non-bank loans, this is a high cost
- usual payment only to a bank account
- high fees if you do not comply with the contract
Risks associated with an online loan
Of course, there are risks and they are not small. The risk of over-indebtedness usually arises for those who have several financial obligations, but after deducting all expenses they no longer have a monthly payment. In extreme situations, distraint occurs and then the debtors have no choice but to file an insolvency petition. Similar is the debt trap where people repay old loans with new ones.