The Internet has become a medium that many use for information purposes. The Internet also offers numerous opportunities for finance. Loans that can be applied for online have become very popular.
Today, they are more than just an alternative to loans at a branch bank. There are many reasons for an online loan, but there are also some points that speak against loans that are applied for online. These are shown in a clear overview below.
Brief overview – pros and cons
|– lower costs||– no direct contact|
|– Banks are easier to reach||– Loan terms are sometimes misleading|
|– Credit comparison easier|
|– easy application and faster payment|
Advantages of online loans
The better conditions:
In comparison, online loans repeatedly turn out to be significantly cheaper. Banks without branches or with just a few save considerable costs for employees, which they can pass on to customers. The loan interest on a loan applied for online is probably the most important advantage for many people with credit needs.
Accessibility of the banks:
As with all service companies, customers can only reach the banks during opening hours. However, the online banks can be reached around the clock. A credit application can be submitted after your own working hours or the customer center can be contacted by phone after 8 p.m. This means that no one is tied to a bank with a branch on site.
Fast application process and quick processing:
The online application process is fairly quick. Personal data must be added to the banks’ pre-configured input mask before the application is then sent to the banks “with a click”. Banks often prefer to process online applications.
Transparency of loans on the Internet:
The loan offers on the Internet are much more transparent than those on the free market. Anyone looking for a loan online quickly stumbles across a loan comparison. The individual data on the desired loan and personal data can be used to calculate how expensive the loan will be. Since many online banks are included in a comparison, this is the instrument that can help to get the cheapest loan. One of these providers, for example, is the Kredite.org portal. Here you can compare many different providers and have an overview of all the loan offers.
Disadvantages of online loans
No direct contact:
For many borrowers, it is still important today to choose the right loan directly with an employee. This is not the case with an online loan application. The employees provide facts about the loan, which cannot be learned in this way.
Presentation of the conditions of the online loans:
Credit institutions must report an effective interest rate online. This has already ensured that customers can also compare the individual offers well. The disadvantage that some banks offer credit-related and other credit-independent interest rates remains.
Customers who do not pay attention to this crucial point when applying will often only realize later that the supposedly cheap offer will not fit their own. If the credit check did not go very well, the banks will raise interest rates accordingly, which will mean additional costs for the customer. A loan that is offered at an interest rate that is independent of creditworthiness often performs worse in the loan comparison, but this interest rate can remain the same for all those who apply for the loan online.