Traditionally, if you wanted to get your hands on some extra credit, you would need to walk into the bank and have a meeting with the bank manager. Although this is still the preferred method for some, online credit applications have risen considerably in the past 10 years. This is as more lenders use websites, online safety has improved, and consumers see the benefits of using this quick and easy method over having a physical meeting at the bank. But what should you look out for? Here’s our top five tips:
#1 Shop Around: Shopping around for a loan is easy online, as you have everything readily available. There are even comparison sites you can use to make the search even easier. However, often you can feel overwhelmed by the sheer amount of choice. Take your time looking, and narrow your hunt down. Do you want a loan that you can repay in 6 months? Do you want a loan you can have access to within a week? Think about what is important to you, and use these factors when determining your search criteria.
#2: Use a reputable lender: Of course, we are well aware of scammers online. It is important that you check out the lender to ensure they are reputable. A website can look very professional, but look for their registered address, and call the phone number to speak to a representative. Check out consumer websites where business listings are held, to see if the loan company appears there.
#3: Don’t apply for too many: It is important that you only apply for one credit product at a time. As money.co.uk says, “Many lenders will view multiple credit applications within a short period of time as a bad thing…Applying for several lines of credit within a short period of time creates the impression that you are in desperate need of funds. Lenders will think you are less likely to be able to pay any further borrowing back on time. They will see you as a risk and may decide not to lend to you on the basis, especially if your previous credit applications were declined.” So, wait for results to come back before pursuing another credit agency.
#4: Be wary of too-good-to-be-true offers: This might include something like, a really great loan interest rate, but it comes with an upfront fee. Be cautious of these lenders, as there should be no real reason for them needing a fee from you up front. Wonga.co.za, who exclusively offer online loans, say that as with their personal loans, there should be “no deposits, no upfront costs or loan application fees required.” This makes online loans often more affordable and flexible, because you are able to set a repayment date that suits you, and you can see the total cost of your loan upfront. There should be transparency in the process: if there isn’t, or something doesn’t quite sit right with you, then something could be wrong. Do not commit to anything until you are totally sure.
#5: Be honest in your applications: When you have found a lender you trust, with a transparent deal that suits you, your application online should be quick and simple. Make sure you are honest when it comes to your income, your partner, your dependents, and any other information they ask of you. Lenders can crosscheck this information and any invalid entries could go against you. After your application, your outcome should also come through quickly, another added bonus of applying for a loan online.