Online personal loans are quite simple to apply for and the application process itself is generally very quick. These personal loans may even offer competitive rates and you can use the money for many different things. That’s because these loans are unsecured loans, meaning they don’t require any collateral to approve the loan. So many people use personal loans for paying off credit card debt, paying medical bills or even fund a business. That’s way the best way to get the best personal loan is to do an personal loan online comparison of all the providers in the country, so you know you’re getting the best deal possible.
How To Choose An Online Personal Loan Provider
How to apply for an online loan?
Applying for a personal loan is very easy in most cases. And finding an online personal loan provider is even easier. The actual application process can take less than 10 minutes and you’ll have the cash in your bank account in less than 48 hours, in many cases it’s the exact same day. Even though information varies from lender to lender, you’ll mostly need proof of your address, your employment status, an estimated credit rating, ID document and some income information. This just helps the lender or broker to determine whether you’re a good candidate for a loan.
May online loan services make the same mistake though. They only give you their own loan deals, rates and expect you to take out a loan based on their information only. Not very helpful we know. That’s why experts recommend you make use of the online comparison found on Likemoney.co.za so you know that you’re getting the best deal for you.
Factors that influence your loan rate:
Like most loans, your credit rating is scrutinized. Each lender has their own requirements but, you’re more likely to obtain a personal loan when you have good credit and a dependable steady income. Let’s say you don’t have a credit score or bad credit. There are lenders that will help you if you have bad credit like African Bank.With no credit, the lender might ask you for your payment history with other bills like rent or utilities.
The interest rates can vary greatly though, should you have good credit the lender will give you a competitive rate. If your credit is bad or marginal, you’ll pay much higher rates or not receive an offer at all. Some lenders will evaluate your income, they have minimum income requirements and these can vary from lender to lender. Usually the requirements are a few thousand rands per months, depending on the loan size and your debt income ratio.
Loan fees to consider:
The actual interest rate is always the first fee to consider. Rates can vary greatly. It can go as low as 5% and even as high as 35% depending on your credit score as discussed about. Just a few percentage points can make a huge difference in the long run, so it’s always a good idea to shop for the best rate possible.
Some companies charge a check-processing fee for though who prefer getting paid by check. Other fees are origination fees; this fee will be deducted from your loan amount.
Personal loans vs Payday loans:
These type of loans are usually high mounts in the thousands, is payed over a period of a few years and takes into account your credit rating and history. Mostly, customers seek out personal loans to fund expenses that a traditional loan may perhaps not cover. In some cases, people also use personal loans to fund home repairs or to prepare for a wedding. It all comes down to one thing, repaying the loan is more important than what you use it for.
These are usually small loans, short term and may be available to those with high-risk or marginal credit. Called payday loans because the term of the loan is generally till the next payday. Most consumers use loans like these to pay for unexpected emergencies or to cover living expense.
Avoiding Personal Loan Scams
For more tips on how to properly avoid any loan scams, check out How to Apply for a Loan Without Getting Scammed. Should you have any other questions or would like to share an experience you had, please write it in the comments below. We’d love to hear from you.