Sometimes, you do not have the money you need, when you need it. This is where lending facilities come in. You could get the money you need from traditional financial institutions such as banks or from online lenders. There has been a growing accessibility of online loans to individuals from online lending firms. The birth of online lending facilities marked a new era in the lending industry. Online lending firms have risen in popularity as traditional banks have become more riskaverse and make several demands.
While there are pros and cons to any lending options, there is a lot of misinformation surrounding the online lending space. It is very important that individuals who are interested in applying for online loans be well informed and armed with facts surrounding the online lending space. Misinformation makes interested individuals miss out on great funding opportunities due to fear.
In many peoples’ minds, the word “loan” has negative connotations. Misinformation is very dangerous, to say the least and you can’t just believe everything you hear people say. There are numerous myths and misconceptions about online loans but we’re here to bust, debunk and put the myths to rest.
Myth #1: One Needs High Credit Scores to Be Approved
If you’ve heard that the approval process is all based on your credit score, then you heard wrong. Lending decisions that were solely based on ones credit history are now a thing of the past. One can be approved with or without a high credit score.
In fact, what most lenders look at is the proof of a stable income to be sure that you can afford to comfortably pay back the loan. The information in your financial statements paints a different picture than what a credit score alone can convey.
A credit score isn’t the only determining factor that gets you qualified. A credit score is important but it is, by no means, the only consideration. A large spectrum of factors is considered for the loan approval process in determining the borrower’s eligibility. However, before applying for the loan it’s important to that your credit score is at its best by always making debt payments on time and managing your credit usage reasonably
Myth #2: All Online Lenders Are the Same
All online lending firms are not created equal and operate on different terms. Different companies have different criteria that they use to evaluate the loan applicants. It’s, therefore, very important that you find out more about the firm before applying.
Check the lenders rating and reviews from their other customers. Take your time to compare prices, terms and conditions, and privacy policies. Be cautious when choosing a lender; avoid companies that ask for up-front fees.
Myth #3: Online Loans Applications are Confusing
Filling out an application for a loan is really simple. It’s actually quite similar to the process of filling a profile for your social media pages. What you do is simply upload your employment and banking information.
Basically, filling out an application should take you approximately 10 minutes.
Myth #4: Customer Service is Unavailable
Nonexistent or poor customer service is a nightmare. If you have an issue that you need assistance with, there’s no one to help you. Online loans do not have poorly managed customer support. If you need help with anything, you have the option of making direct calls and asking for help.
Myth #5: Online Loans Take Forever to Be Approved
The most important question on a borrower’s mind is, “how fast can I get the cash?” You can rest assured that application for online loans is not a lengthy process. Misinformed people think that online loans can take weeks or even months to get approved. The online loan approval process takes approximately 2448 hours for your request to be reviewed.
The lenders will have the money in your account as early as the next business day after your loan is approved.
Myth #6: Online Lending is Expensive/ Unaffordable
Beware of predatory lenders who set their interest rates too high targeting unqualified borrowers. Most online lenders are reputable and often charge singledigit rates and come with very reasonable terms and conditions.
There are lenders who offer accounts short terms loans, and lines of credit. Also, depending on the type of loan you apply for, and your risk classification it can be expensive.
Myth #7: Online lending is a Scam
Online loans aren’t con artists with unreasonable rates. The reason why people may feel that online lending schemes are scams is due to the unscrupulous brokers who have engaged in predatory lending giving the entire industry a bad name. People are usually skeptical of new things.
If you find an online lending firm that offers higher rates, it’s highly likely that they’re dealing with borrowers who are considered risky.
Myth #8: I Borrow Small Amounts
There is no amount that you cannot get from online lenders. You can get loans that are as low as $500.
Myth #9: If you ask for too Much Money they’ll automatically deny you the money
If you ask for a large amount you will not be automatically turned down. What happens is that if the lender feels that the amount you requested for is too high, they will offer you a loan amount that they feel you can afford to pay easily.
Myth #10: Online Loans are totally unregulated
Online lending firms are expected to follow the law. The laws include the Fair Credit Reporting Act; this states that lenders cannot refuse to loan people money based on their race, gender, religion.
There are, also, limits set to limit the amount of interest charged on the loans. These laws
Myth #11: Online Loans Are For Supreme Borrowers
Individuals with notsogood credit scores can qualify for loans from online lenders. You do not have to qualify for bank loans in order for you to get accepted by online lenders.
Myth #12: Computers decide if I Qualify
Not all online lenders use heartless algorithms to determine if you qualify for a loan or not. Lenders consider a variety of both objective factors and consider subjective factors too. They will call the borrower and interview him/her over the phone to try and make a decision.
Loan applications are not controlled by concrete variables saying “yes” or “no”. The lender’s main concern is if the loan payments will be paid on time or not.