When you don’t want to waste time at the bank, online loans offer a convenient way to get the money you need in an emergency. There are no lineups or in-person meetings, just an online application form that is quick and easy to fill out.
But just because online loans offer a shortcut here doesn’t mean you can rush through everything else.
Before you sign your digital name to a loan, make sure you know everything there is to know about these three things:
1. Origination
Knowing who you’re borrowing from is a crucial detail of your online loan, but it’s not always clear when you hit the web.
You may run into loan matching services find loans on your behalf. Acting as brokers, they’ll shop your information around to lending companies within their network, and you might receive offers from several companies at once.
With so much going on, it’s easy to confuse things, and you’re more likely to make a bad decision when you get your wires crossed like this.
Online direct lenders promise a much more straightforward experience. They remove brokers or third parties that complicate your online loan so that it’s just you and one company.
Take MoneyKey as an example. They’re one of the online installment loans direct lenders available in the U.S. You only have to share your financial data with them and not several other companies, unless you’re in a state where they don’t operate as the lender.
As long as “direct” is in the name, you know they are the one and only company involved with your online loan when you check out the online solutions from MoneyKey, other installment lenders, or direct payday lenders.
2. Rates and Terms
Online direct lenders come in all shapes and sizes, but only some might fit your financial needs. To make sure they’re the right borrowing option, compare their rates and terms.
The rates and terms help you answer these two critical questions:
How much will it cost? Your rates share the interest, fees, and other charges applied to your loan, letting you know how much you’ll owe on top of your principal.
How long do you have to repay it? Your terms give you a repayment schedule. Direct payday lenders may only give you until your next payday. Online installment loans direct lenders, on the other hand, break your repayment into multiple installments.
Never borrow money without knowing your rates and terms. You can’t determine if a loan is a financially sustainable choice without these details.
3. Requirements
You can do all your research to find the best possible loan for your needs, but you still may not get it. Another big part of borrowing money online is making sure you match what online direct lenders want from their borrowers.
This usually means you’re old enough to borrow, live in the state where they are licensed to lend, and meet a minimum credit score. This last one is crucial, as it also determines the rates you may pay.
Make sure you fit all the requirements before you apply, as this improves your chances of being approved.
Bottom Line
Borrowing money online is simple and convenient, but it should be done carefully like any financial decision. Always know its origination, rates and terms, and eligibility requirements. These three details will help you find the best fit for your needs.
