When life hits hard, we find ourselves forced to make some difficult decisions. For some people, that may mean leaving their jobs and looking for something more worthwhile. Unfortunately, the situation of the current global economy has largely limited our freedom when it comes to these decisions. Unemployment rates are soaring more than ever in every corner of the globe, making it extremely difficult to make more money – much less save what we had stored throughout our lives. Under these unstable circumstances, many of us have found themselves cornered with no way out of their financial dilemma other than taking up a loan. Are online loans available for anyone, though? Let’s see your options. The article below was compiled with the help of PureLoan experts.
When to Seek an Online Loan?
Basically, online loans are as available as any other kind of in-person loan. You can seek an online loan for any of the following purposes:
1. House Financing
Whether you’re buying a new house, want to run maintenance, or doing small house renovations, getting a loan may help you with the finances involved.
2. Getting a New Car
Getting a new car is an important step in the life of anyone, but financial difficulties may be standing between you and your dream. By looking through different loan options, you’ll be able to find one that helps you finance your new car.
3. Emergency Cash
Life has a way of making the unexpecting come true. In life and death situations, or even in dealing with fallouts, you’ll be able to get quick and simple cash by looking through online lenders. Many services offer small amounts of loans to be paid in a short span of time. As Kapitus explains there are many short-term financial solutions at your disposal.
4. Debt Consolidation
Going into debt to pay off a current debt is a vicious cycle, but sometimes, you can’t seem to have any other option. You may find a more lenient online loan that helps you pay off an urgent debt to avoid high-interest rates.
5. Medical Care
You’ll be able to find many programs that offer loans designated for medical healthcare purposes, especially in the case of dealing with chronic conditions or cancer therapy.
Different Kinds of Online Loans
Depending on the loan you’re applying for, there may be more eligibility criteria and terms included. Here are some of the loan options you’ll find while surfing the internet.
1. Personal Loans
Personal loans are often available through banks and credit unions, but some online lenders offer personal loans for general purposes as well. You may check the website of your bank or credit union to see if they offer online lending services, which many do. It’s quite common for personal loan providers to evaluate your eligibility based on your credit score. Some may refuse to give a personal loan if your credit score falls beyond a certain limit, while others offer the loan with higher interest rates. One of the limitations of personal loans is that they usually start with large loan amounts, so if you’re looking for a small amount of cash, it’ll be difficult to find a suitable option.
2. Payday Loans
If what you’re looking for is a quick and small sum of cash, then you’d better consider payday loans. The match-making experts at GreenStarCash explain how payday loans work in simple steps: you fill in and submit the application, your application is reviewed, then it’s sent to a list of potential lenders. Since the network of matchmaking services is large, they have direct contact with multiple lenders, each with their own set of criteria and terms. Once a lender accepts your application, you finalize the deal and cash in your money quickly, maybe even in the same day.
3. Peer-to-Peer Lending
Peer-to-peer, Peer-2-peer, or P2P lending is one of the most common of online loans. When it first started, it consisted of normal individuals who offer loans for people in crisis or looking for a quick way to get a loan. Each lender would have their own terms, but thanks to their online availability, you can explore all your options from the comfort of your home. In recent years, P2P lending expanded to include corporations and institutes offering the same kind of loans instead of being limited to individuals.
4. Automotive Loans
While you can get a personal loan and use it however you’d like, sometimes, getting a loan for a specific purpose may be more beneficial for you. Many car vendors, banks, and private institutes offer auto loans that are specific to financing a new (sometimes used) car. Most auto loans offer minimum limits on their loans, as well as demand their own set of specific eligibility criteria.
5. Student Loans
Aside from getting a loan from the educational institute itself, you may be able to find multiple online lenders who designate their services for students and their needs. Most of the time, you’ll have to demonstrate your financial need for support, while providing citizenship/residence proof, personal identification, valid social number, and be registered. Some institutes may also demand a minimum degree of education, minimum academic scores, or proof of enrollment into an educational facility.
Who is Eligible for Online Loans
Here comes an important question. Are online loans really available for all? Well, yes and no. The answer depends on the online lender and the eligibility criteria and/or qualifications they’d declared. The good news is that, although some lenders do, in fact, have certain eligibility criteria, your options are much more diverse than in the case of in-person loans. Generally speaking, most online lenders will have the following minimum qualification criteria:
- Age limit of 18 or 21 (depending on the state) or older
- Residence in the same state as the lender
- Proof of income
- Valid and active bank account
After filling in the application, you can get your results in a matter of seconds usually. Keep in mind that the lender may want to ask you additional questions, require more documents, or make you go through an interview before accepting your application. Once the loan is approved, they’ll discuss with you the loan structure and repayment schedule. If everything is in order and you agree to the terms, you can sign the contract and receive your loan.
Online loans are practical, simple, and diverse. However, ensuring the authenticity and trustworthiness of the online lender is a must before providing any personal information or signing a contract. Moreover, make sure you have a full understanding of the debt structure and terms to avoid making your financial situation worse.