Personal loans can be a good alternative to high-interest credit cards for people who need to get money quickly. The availability of online personal loans has expanded the lending options for many people, due to the advantages they offer over traditional loans. Consider these five benefits of online personal loans when comparing financing options.
1. Lower Interest Rates
Online loans can often offer lower interest rates than many traditional brick-and-mortar lenders because they do not have the expense of purchasing, operating, and staffing multiple bank branches. When comparing rates between loans, do not forget to include the cost of any fees, such as origination fees or closing costs.
2. Quick and Easy Application Process
The application process for a traditional loan can be lengthy and cumbersome. Most online lenders offer a quick, easy application process and some can approve a loan in as little as one week. As a bonus, you can apply for an online loan without ever leaving your house, which means not getting dressed up, making an appointment, and sweating it out in the loan officer’s office. Oftentimes, you’ll be able to assess what your payment might look like by using a secured loan calculator which many personal loan websites provide.
3. Bad Credit Options
Most online lenders have minimum credit score requirements; however, there are usually more options open to people with lower credit scores with an online lender. These lenders may place a higher value on cash flow and employment history than on credit score, making them an option for borrowers with poor credit history, but current stable income and employment.
4. More Perks
Online lenders often offer borrowers incentives to use their services, such as unemployment protection, discounts for setting up automatic payments, pre-paid debit cards or promotional items. These incentives are seldom reason enough on their own to take out a loan, but if everything else is equal between two lenders, they can put the online lender over the top.
5. Emergency Cash
Many people do not have the cash flow to cover emergency expenses, such as unexpected medical bills, or repairs to their car or home. The advantages of a line of credit can be a good option for people who need to get money quickly to cover an emergency expense.
Personal loans can be a less expensive way to finance purchases or emergency expenses than credit cards. Online loans can put money in your hands faster and are often less expensive than borrowing from a traditional lender. If you don’t have good credit or no credit at all, you can also look into no credit loans as they cater to those that are working towards improving their credit.