Getting A Loan Online Is Easier Than Ever

In the past, getting a loan typically involved a lot of running around and lots of paperwork. To put it mildly, applying for a personal or business loan could be quite stressful. Today, however, things have changed dramatically. Thanks to advances in the online lending industry, online loans are highly competitive, in addition to their far greater their accessibility. In fact, the personal and business loan options available online could shock you!

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Getting an online loan could be easier than you think

Applying For An Online Loan Is Easier Than Ever

Whether you are looking for an online business or personal loan, finding the right lender and applying for a loan is easier than ever. How exactly? Here are a few reasons:

-Variety of options. More and more lenders start offering online loans. In fact, some lenders specialize specifically in online loans. More lenders means more competition and better rates.
-Plenty of information online. If you aren’t quite sure how personal or business loans work, then you can find a wide range of high-quality guides online. You don’t really need to understand all the ins and outs of loans, but having a solid grasp of the basics is important.
-Easy access to credit reports. In virtually all countries today, you can access your credit score (or equivalent info) online without the need to leave your house. And if you live in the United States, all three nationwide credit reporting companies are required to provide you with a free copy of your credit report once a year at your request [1]. This makes matters much easier.

One thing to keep in mind here though – you need to be vigilant when looking for loans online. Only deal with reputable online lenders. Payday loans should be avoided too because their annual percentage rate tends to be very high [2].

Fortunately for you, telling apart legitimate lenders from scammers is rather easy. You may read user reviews online, as well as check for any official complaints the lender has received with a governmental agency, like the Consumer Financial Protection Bureau.

Online VS In-Person Loans

It’s also perhaps worth it to have a look at how online loans compare with in-person loans in general.

Well, among the advantages of online loans are [3][4]:

-The entire process may be completed from your computer or even phone, without you having to personally visit the lender.
-Online lenders typically offer pre-qualification, allowing you to see loan terms with no impact on your credit score.
-Loan approval and disbursement are faster. Some lenders offer same-day approval and release of proceeds.
-Online lenders have lower operating costs, which translates to lower rates for consumers. But rates may vary considerably from lender to lender.

Face-to-face bank loans have advantages too. Most importantly, in-person interaction with the lender allows you to get more personalized service. Not everyone is comfortable with submitting personal information without direct interaction with the lender as well.

What Do You Need To Apply For A Personal Online Loan?

The documentation you need to apply for a personal online loan is the same as with traditional bank loans. It includes:
-Personal information such as the last digits of your Social Security number.
-A form of identification.
-A proof of income.
-Your credit score.

All this information is provided to the lender in digital form. Many lenders accept screenshots or photos too, so you most likely won’t have to print or scan any physical documents.

What Do You Need To Apply For An Online Business Loan?

You may borrow an online business loan if you are looking to [5]:
-Start your business.
-Grow your business.
-Manage day-to-day expenses.
-Purchase new equipment.
-Repair existing equipment.

To check your eligibility for an online business loan, lenders typically require the following information:

-Your credit score with each of the three major credit bureaus.
-How long you have been in business.
-How much money your business makes annually.

For larger business loans or business loans at the best terms, your lender will likely require a number of additional documents as well, including but not limited to:

-Your business plan.
-Business financial statements.
-Personal and business tax returns.
-Personal and business bank statements.

No matter whether we are talking about personal or business loans, lenders want to avoid high-risk borrowers. Eligibility requirements may vary from lender to lender, so make sure to do your homework to know what you are dealing with.

Pre-Qualify With Multiple Lenders Before Making A Choice

Ideally, you would pre-qualify with multiple lenders – this would allow you to compare terms and choose a personal loan that is best for your budget and needs. Look up available options online, make sure to find out what other people think about prospective lenders, and try to pick the best deal.

If you need immediate personal or business funds, you may be shocked at how quickly and easily you can access them via online lending.

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Sources:
1. “Free Credit Reports”, U.S. Federal Trade Commission, https://www.consumer.ftc.gov/articles/0155-free-credit-reports
2. “Payday Lending”, U.S. Federal Trade Commission, https://www.ftc.gov/news-events/media-resources/consumer-finance/payday-lending
3. “Online or In-Person Loans: What’s Better?”, NerdWallet, https://www.nerdwallet.com/article/loans/personal-loans/online-loan-or-bank-loan
4. “8 Online Loans: Shop for Personal Loans in 2020”, NerdWallet, https://www.nerdwallet.com/best/loans/personal-loans/online-loans
5. “How to Get a Small-Business Loan in 5 Steps”, NerdWallet, https://www.nerdwallet.com/article/small-business/how-to-get-a-small-business-loan