It’s recently been reported that over 20 million Americans have taken out personal loans. And it’s not hard to understand why. As we come up to 2023, the cost of living does not look like it’s going to get cheaper any time soon. If anything, it’s the opposite.
With the R-word being thrown around, it’s understandable that people are relying on loans to help them out. But if you’re considering online cash loans, have you done your homework?
As with any loan, you should make sure you do your research before going for it, so there are no surprises after you’ve signed up. Read on to learn everything you need to know.
1. What Are Online Cash Loans?
Also known as a personal loan, an online cash loan is an installment loan. That means you borrow the money you need and then pay it back at a fixed rate each month. That is with insurance added on top, of course.
The typical length of an online cash loan is between 12 and 84 months, depending on how much you take out. Once the loan is fully repaid, the account will close. Simple as that.
The amount available to you with an online cash loan depends on a number of factors. Mostly it’s about your credit score and your health. The lender will use this information to decide how much you can borrow, but typically it ranges from $1,500 to $100,000.
2. Where Can You Get One?
You might think that the obvious choice of where to get a loan would be the bank. This is certainly a good place to start, but there are actually several other places you can get a loan from.
Financial institutions such as consumer finance companies, credit unions, and online lenders like fintechs are all options to consider. It’s important to make sure you shop around before deciding who to go for. Different lenders will have different rates that will make a difference in exactly how much you need to pay back.
Companies like fastloandirect.com are great places to secure online cash loans.
3. Does it Affect Your Credit Score?
An important aspect to consider when taking out an online cash loan is that this will affect your credit score. The checks that lenders need to do as part of your application process will mean they will do a hard inquiry on your credit. Doing so, this can lower your credit score.
The hard inquiry will tend to stay on your credit report for around two years, so keep that in mind, and don’t apply for too many. Alternatively, there is an option called a soft inquiry.
This is done by lenders you already have an account with. If possible, check with these lenders first.
4. What is the Application Process?
There is a process that needs to take place in order for you to get an online loan. This includes an application process that the lender will use to understand who you are, how much you need, and how reliable of an account you are. They need to know you can pay back what you are borrowing.
To begin with, they will need your proof of identity, address, and income. Some examples of what they might ask for include:
- Pay stubs
- Bank statements
- Mortgage statement
- Utility bills
- Tax returns
The reason they ask for all of this upfront is that it will make it easier for them to give you a fast loan. The faster the application is processed, the faster you have the money you need.
5. Are There Alternatives?
An online cash loan is not always the best choice for you. It’s important to analyze your situation to make sure you’re getting the best deal for what you need. There are, however, other options available to you.
This includes credit cards or a home equity loan. Both have their pros and cons. With a credit card, you might be able to get a better rate if your credit score is high. However, failure to clear your balances on time can mean huge interest fees of thousands of dollars.
If you own a home, a home equity loan might be for you. While they usually offer high amounts at low rates, your home becomes the collateral should you become unable to pay it back.
6. Will You Incur Fees?
When taking out a loan of any kind, it’s incredibly important to check the small print, so you understand the full picture. You might be getting the money you need, but checking for hidden fees is a must.
That could include an origination fee. Typically between 1-8% of your loan amount, it tends to be deducted from your loan account. That essentially means you’ll need to borrow more than you thought you would have to.
See How a Cash Loan Could Help You!
Taking out online cash loans can be a great option for you. A fast loan can mean you get the money you need for a project quickly without having to go through a lengthy process and wait months for the money.
Make sure you research well and choose your lender carefully. Knowing the whole picture of your loan – fees and effects on your credit score included – is an important aspect when borrowing money.
The great thing is, the option to borrow money is available to you! Follow our tips, and you’ll be fine. If you’re looking for some more informative articles, check out our other blog posts!