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Should You Get Loans Online?

Amanda's Note: This was provided by an online contact. 

As has been noticed already, Credit Unions are really giving commercial banks a run for their money in the banking and lending sector. In fact, these unions are booming while the mainstream banks are taking a huge hit. The process of lending money has been simplified and gone universal. You can now borrow money from an online lender.

Now the question is: should you really get loans online? What advantages do you accord yourself when you do that and how do they compare with the alternative? Below are the facts to ponder over:

  1. Applying for Loans Online is Convenient

With commercial banks, you would have to make the trip to the bank to apply for a loan. With online lenders, all you have to do is click a few buttons and get your loan application approved fast as you stretch your legs on the couch at home. All transactions are online-based and less prone to errors since they’re handled by dedicated systems and personnel.

Also you can apply for loans online any time of day or night as the system is always accessible. Communication is also private. If you don’t want anyone to know you’re getting a loan, no one will. On the other hand, you would have to literally “sneak” into a bank to accomplish that with the mainstream banks.

  1. Easier Access to Low-rate Loans

Banks are a picky lot. They won’t give you a penny if your credit score doesn’t make them smile. Online lenders will skip all that and extend you a loan even if you have a low credit score. In fact, when you take loans online, you can get a part of your target amount if it’s funded by an individual investor. Banks don’t give you that luxury as they insist on full clearance for you to get the loan.

When you’re looking for a loan, you want something you can afford – something with the lowest interest rates and fees. The rates charged by online lenders are lower because of their low operational costs as compared to banks which have to pay their staff, rent, and other bills.

  1. Security

The last thing you want is borrow money from a rogue broker or doorstep loan shark and spend your life running from them as they auction your property to get their exorbitant interest amounts. You can ascertain an online lender’s credibility by checking online reviews and as well as the Financial Services Register. In fact, when you take loans online, they’re basically unsecured loans. You don’t have to have your belongings held “hostage” to get a loan.

Online lenders also use the latest technology to keep your data and communication safe unlike physical banks that use word of mouth and physical documents with your sensitive personal information.

You see, finding loans online could be your gate-way to success in ways that other banks wouldn’t help in. All you need to do is compare the various online lenders and pick the best.

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Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.