The times have changed; now almost anything can be done online, including banking, credit card applications, and loan applications. In the past, consumers had little choice when it comes to loans. They could go to a bank or a building society. Today we have what is known as instant secured loans online that help people like you – with poor or no credit history – manage their money and apply for loans for personal investment.
Here we present five advantages of choosing online guarantor loans over traditional borrowing methods. Let us walk you through the range of choices, help you decide what’s best for you, and save you money.
A range of choices
There are three broad choices of instant online loans.
- The first is the online guarantor loan. With these types of loan, you are required to provide the name and contact details of a third party who will become financially responsible for any loan repayments that you are unable to meet. Guarantors are usually parents or other financially stable family members or friends
- Peer-to-peer lending is a relatively new approach to the old lending methods. Instead of borrowing from a business or an investor, you are borrowing from a person. Instead of friends or family, you borrow from strangers. The conditions such as the repayment period and the interest are then the responsibility of the lender and the borrower to decide
- Income contingent loans are not affected by your credit history. Instead, the lender only looks at your ability to pay now – your income and expenses without worrying about past bad credit. It is a good choice for people who have been unemployed for a long time but have recently returned to work and have a reliable income again.
Speed ââand convenience
Instant online guarantor loans are approved much faster and you don’t have to go to a bank to apply for them. All you need is an electronic device and an Internet connection. Fill out all the details on the online form, leaving nothing out or the lender may request additional information. Everything happens online, including depositing and withdrawing the loan to your bank account, and administering the repayments.
The lender will demand less information from you than your bank would need, and because they (usually) only specialize in loans, the application-to-approval process is much more streamlined. They are much less selective than banks which means a higher approval rate and less scrutiny of why you need the loan. They can ask for the goal, but they won’t necessarily examine it so deeply because your ability to pay is more important. You could easily receive a loan within 15 minutes of entering the required information.
Lower interest rates
Online instant loan providers rarely have the overhead costs of banks and other traditional money lenders with brick and mortar premises. Reduced overhead and investment risk means that the cost of running an online loan company is lower than that of a retail bank, therefore, the cost for the customer to take out a loan product is also cheaper.
Second, the rate will be fixed on larger, longer-term loans. Applicants do not have to worry about variable interest rates, which are a significant burden if the client takes out the loan to consolidate other loans and credit products.
Online loans represent real cost savings. Even if you don’t have a bad credit or no credit history, that alone is a good reason why you should consider this type of loan first.
Another major advantage, and one that attracts people with poor or no credit history to this type of loan, is that they are great for fixing your bad credit history. People with poor credit struggle to get approval for any type of loan. This can be problematic if personal financial difficulties are in the past and the applicant is able to erase all the debts that he has incurred.
Any good credit history – a loan paid off, credit card balances cleared, no defaults on loans and credit payments, will repair your credit score. However, there is a vicious cycle as people with bad credit find these products difficult to obtain in the first place.
With instant online loans, you have a great stepping stone to improving your chances of getting credit in the future.
Flexibility for personalized loans
Online loan providers make it as easy as possible for you to determine how much, and when, you can borrow and repay each month. It’s not something traditional banks do until the process is at an advanced stage. Juggling the numbers can take time. With an online calculator, you can plan your finances around the loan, see what’s affordable, and adjust repayment terms to your personal preferences. This way you know exactly what and when you are going to pay it back.
Fill in the loan amount, your income, the number of months you want to pay back and press a button. The site will do the math for you before you decide to go ahead and will adjust in an instant. It’s not just flexible; it is also transparent.
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