Any loan applied for over a website can be called an online loan, including small business loans and the more traditional mortgage loans. A variety of lenders are available to offer you an online loan, and each differs slightly from the others with their application and decision-making process. Usually an online loan application is much simpler and quicker with no need to upload or fax in any documentaion at that time. The lender can usually make a decision on the spot of you sumbitting your application and after they run a quick credit check and look at your financial situation. Some lenders may want to speak with you before releasing any money so that they can start building a relationship for future loan needs. If you have questions regarding how loan APR's and Fees work, you can use our personal loan calculator to help answer some of your questions and get a better idea of what a loan will look like.
Choosing The Right Online Loan
There are a few things you should think about before entering into any kind of loan program. What type of loan will you need for your situation? Business Loan, Personal Loan or a Single-Pay Loan and how much you can afford to repay depending on the loan terms, daily, weekly, bi-weekly or monthly. Understanding this will also help you and the lender come to a loan amount agreement. Knowing all fees that will be charged and asking about any hidden fees you should be aware of like early payoff fees.
If your credit score is less than perfect, it might be a good idea to speak with the lender to explain how you got into your situation. There are some lenders that will work with you based on your personal history and find a better APR or give you lower fees. Choosing a lender that you can talk to and trust will most likely lead to an extended relationship beyond the first loan.
If you borrowed $1,000, with a repayment term of 36months. Your estimated repayments are:
|Type of Lender||Estimated Repayment Cost||Time to Funding|
|Term Payday Loan||$6,050, APR 170.67%||Same Day|
|Single-Pay Loan||$1,300, 30day term APR 365.00%||Same Day|
|Online Personal Loan||$1,250, APR 8.45%||1-3 Business Days|
|Business Loan||$1,495.03, $245 fee APR 16.73%||1-5 Business Days|
What are the benefits of borrowing online?
Applying for a loan online allows for privacy while using tools made available to you by some lenders or websites that offer a loan matching service. Some sites also allow you to do a quick credit check using non personal details so that you can see the likelihood of you getting approved with out impacting your credit profile. You can use our credit score estimator to see how it works.
Online loans are playing an important role in todays finanical market as banks have scaled back on the loans they are giving out. Online lending has opened up more options for anyone looking for a loan, weather you have great credit or not so good you should be able to find a lender with a loan program that will work with your profile.
Applying online for a loan also allows you to compare different loan programs and options and lenders to see which one fits your needs best. When you are ready to start your application you will need to have some of the following details on hand:
- Name and Contact Information
- Some form of legal identification, i.e. SSN, ITIN or Alien Registration number
- State Drivers Lic or ID Card
- Financial information, how often do you get paid and where it comes from, i.e. Emplyment, or any kind of benefits.
- Banking information, what kind of account you have Checking or Savings and are you allowed to receive electornic deposits.
Exploring loan options
Fortunately, today there are many options for getting an online loan for your needs. If you're in need of a small amount loan with not so great credit there's many online single-pay loan lenders to choose, keep in mind that you will be paying a higher rate and fees and the repay terms are normally 14 to 45 days.
If your credit is fair to excellent your options are much larger, a personal loan program may be the right fit for your needs. Personal loans offer, depending on your credit history, better rates and terms and offer a larger loan amount normally with a minimum loan amount of $1,400 to as much as $35,000 with payback terms from a few months to a few years. from as the same goes for lager amount loans with longer terms
Online Small business loans are a little different from the two mentioned above and can involve some trade-offs. As a small business owner you have the option to apply for an SBA loan which could have the lowest interest rates but with the longest time to funding. Online business loans like online personal loans are good options when the funding is needed within days at times even within a few hours, but the trade-off is you having to pay higher a APR and more fees. There are a few qualifiers needed to when looking into an online small business loan, if your business is a startup with under a year of history and pre-revenue you probably won't qualify. You may want to consider getting a personal loan if your credit is in good standing. Most lenders will require you to be in business past one year and be able to show revenue your business makes each month.
Before applying for a business loan here are a few questions lender may want to know or ask to see if they have a program that is a fit for your business needs.
- How do you plan to use the money?
- What is your personal credit score?
- How old is your business?
- Amount of loan looking for?
- Are you looking to sell your business in the next year?
- Personal experience