Advantages of online personal loans

February 14, 2018
Online personal loans are one of many options that people have when they need to borrow money. How do they compare to credit cards, personal loans from banks, secured loans and lines of credit? Like any form of loan or credit, online personal loans are ideal for certain situations and not ideal in other instances.
Advantages of online personal loans

Here are five advantages of online personal loans. If you think taking advantage of these positive traits will help you in your current situation, then an online personal loan could be right for you. 

  1. They are convenient. Online personal loans are one of the easiest forms of credit to obtain. You can apply online, instead of having to go to a bank branch. The approval process is quick, and many online lenders will ask for a bank statement and pay stub instead of performing a complete credit check. Often, you will have the money in your bank within one business day. This is much faster than any other form of credit. 
  2. They are ideal for emergencies. The quick approval time makes online personal loans a logical choice for emergencies. People often use credit cards in emergency situations, but an online personal loan could be better because it may have a fixed interest rate, it can be for the exact amount that you need, and the loan will be in cash (so you will know exactly how much you have to spend).
  3. They can be for smaller amounts. The problem with many bank-sourced personal loans is that you have to borrow a minimum amount and that amount may be more than you need. Online personal loans are sometimes available in smaller amounts, so if you only need to borrow $500, then you only have to borrow exactly $500. 
  4. They are unsecured. This means that you will not have to put up your property as collateral when applying for an online personal loan. You will not have to risk your house or car or other assets. Yes, secured loans may have a lower interest rate, but since online personal loans are for small amounts of money and they have quick payback periods, the interest rate is not as much of a factor as it would be for longer term loans.
  5. They may not require a complete credit check. This factor means that online personal loans are a good option for people with poor or fair credit scores. Online money suppliers may ask for proof of income, such as a pay stub or bank statement, but they may not require a complete credit check that looks at your credit history and credit score. 

If these advantages will prove beneficial to you (for example, if you need a smaller amount of money quickly and you do not want to go through a lengthy application process), then you should certainly consider an online personal loan.