Before the COVID-19 pandemic and before social distancing and lockdowns were ever foreseen as a part of our daily lives, online loans were already going strong. With rising growth rates and tightening regulations, online loans lately became stronger and safer, which led to competition and extensive marketing. A continued demand put it all together, making the online lending industry in itself. Fast forward to a few months past what can be termed as one peak of the pandemic, and people have resorted to processing almost everything online! Naturally, this has led to even stronger demand for online loans.
Before you go ahead, you should know that this article deals with loans from non-bank entities – direct lenders that provide loans like payday loans, installment loans, and similar services via a completely online medium. It does not pertain to any bank loans that can be processed online to any extent or to the online mortgage brokers who may deal their end of the loan transaction with the lender partly or fully online.
Why People Choose Online Loans from Direct Lenders
The number of borrowers who choose non-bank direct lender loans and aren’t aware that these tend to be more expensive than bank loans, would be a very tiny percentage of the number of borrowers who choose direct lender loans. It is safe to say that direct lenders are providing loans at a higher risk factor as they cannot seek collaterals, they cannot freeze bank accounts of borrowers and they are likely to accept bad credit scores. Hence these loans are high risk loans, which ought to be resulting to high returns for the lender as risk almost always goes hand-in-hand with returns.
Nonetheless, there are attractive benefits, which many value as much as the added charge they may have to bear. Here are 5 strong reasons why people choose online loans from direct lenders.
1. Same Day Approvals
Many experienced lenders with strong policies and practices manage to promise a same day approval on online loans. This is done thanks to extensive automation and a higher volume of demand that gives a scale benefit to online lenders over pawn store lenders.
2. No Credit Check Loans that accept Bad Credit Borrowers
Loans with no credit checks that can be offered by non-bank direct lenders, make them more preferable to some and the only option for some others (borrowers with bad credit scores).
3. Payday Loans – Very Short Term Loans
Payday loans are a hot selling product of the online lending market. Their very short terms that stress buyers for the least amount of time are a major benefiting factors to many borrowers.
4. Online Loans with Monthly Payments – Personal Installment Loans with Short to Medium Tenures
Some direct lenders like us at CashUSAToday also offer monthly installment loans via a completely online process. These personal loans can be flexible in terms of tenure and repayment plans, which are welcoming factors for many borrowers.
5. The “Easy” Factor
The last but definitely not the least is the fact that online loans – and as a matter of fact online almost anything – is simply easy!
Choosing a Safe Online Loan
When choosing a non-bank direct lender loans, there are always concerns related to the safety of the loan. Safety of a loan comes in 2 tiers, which we reflect upon, right here.
1. Borrowing an Amount you can afford to repay on time
The first step in being safe while choosing any direct lender loan, and especially one with no credit check or no hard credit check, is to know whether or not you shall be in a position to repay the amount. The interest rates are higher than bank loans and if a credit check is not done or not thoroughly conducted, there is an increase risk factor in it for the borrower as the lender has not been able to assess every relevant aspect of the ability and tendency of the borrower to repay the loan on time.
Not repaying a loan on time, runs you into a risk of falling into a debt cycle, escaping which can take a long and strong struggle. So if you’re choosing a direct lender loan, it is essential to know that you shall be able to repay it on time.
2. Picking a Legitimate Online Loan Lender
While online direct lenders are generally easier to judge for legitimacy than store based lenders due to the presence of reviews, feedback and certain other factors, here are tips that can help choose a legitimate online loan lender, filtering out one that is likely to be illegitimate:
- Mindfully browse through the website and filter out a lender whose website seems unprofessional or is unsecured – it’s likely to be a sign of an illegitimate lender
- Reject a lender whose business lacks accreditations like BBB (e.g. the one in the bottom of this page)
- Look for contact details on the website – phone, a registered address and an email ID are an absolute must
- Look for genuine customer reviews
- After you apply for a loan, ensure you understand the offer document and that it’s transparent. When in doubt, you should be able to reach the customer support team
If any of the above doesn’t seem to be in order, it’s important to reconsider the decision and look for an alternate online direct lender.
A great place to find a legitimate and convenient online loan is CashUSAToday. Flexible payment plans and quick loan approvals are signature to our services, which can be accessed via a simple 3-minute online loan application form.