What is the Better Way to Get a Loan? Online or In Person

What is the Better Way to Get a Loan? Online or In Person
22 Jan 2020 11:50am
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Are you looking for a loan? Need cash in a hurry? Running short of money can be a worst financial scenario in anyone’s life. Temporary cash crunch can happen to anyone at any point of life in their life. It happens due to various reasons like unexpected emergencies, moving or switching jobs, liquidity issues and more. There are times when financial outflows hit your wallet before it is replenished by new money coming in. Even sometimes the recommended emergency fund of three to six months is not enough to cover sudden emergency expenses. This leaves you with no other option than applying for a loan.

So What Is The Better Way To Get A Loan? Online Or In Person

No matter what loan option you are looking for, you will get many options today to choose from. There is a traditional route where you can visit a loan officer at your bank or any other financial institution and another more modern option of an online lender that can get you a loan virtually overnight, if you qualify.

Today the Internet technology has so much revolutionized that you can get anything while sitting in your home comfort. The situation is no in different when you plan to take up a loan online. Getting a loan online is fast, easy and hassle-free, especially when you use reputable money lending websites.

There is a wide range of online lenders available on the web that offers a number of loan options, but choosing the best option is not that easy. It can be a big task to find safe and legitimate online lenders that offer affordable loan deals. Engaging with reputable online lenders can help you do the business in a safer and hassle-free manner with the fast loan approval process.

In fact in the era of digital world today, all banks and other financial institutions are using the online platform to operate their banking and financing business. So they are providing faster and easier way of transaction, right from your home comfort in just few clicks of mouse. From the loan application, approval to loan amount disbursal can be transformed online in a much easier way. If you are looking for a personal, business, short term or payday loan, you can definitely consider online lending financial companies and legitimate lenders.

To Be Eligible For A Loan In Canada, You Must:

  • Be above 18 years of age
  • Be a resident of Canada
  • Be the owner of a bank account
  • Be regularly employed with fixed monthly income
  • Have proof of identity
  • Have some kind of Canadian credit history

Meeting all above mentioned requirements can make you eligible to apply for a loan in Canada in general. But to get the best interest rate and conditions, you will need:

  • A credit score that is average to excellent (ideally over 650)
  • No history of bankruptcy

A low debt to income ratio that should be below 36%, the percentage of income that goes toward paying debt

Getting A Loan From Banks:

  • You will likely to have a good credit score to qualify for a loan at a bank
  • If you are already a bank customer, you might get benefits such as applying without visiting the branch
  • For existing bank customer, one can qualify for a larger loan amount
  • Some large banks offer free credit scores or loans with no origination fee
  • Loan amount and rate of interest on loan vary from bank to bank

Getting A Loan From Online Lenders:

  • No need to visit a bank or wait in long queues to apply for a loan
  • You can complete an online loan application form in just few minutes, using few clicks of mouse
  • Online loan process is easy and straightforward
  • Provide your necessary details and receive a lending decision in no time
  • Make online loan comparisons and use loan calculator to estimate the loan amount and rate of interest
  • Once approved, get the amount right into your bank account in few business days

Whether you need external financial help to cover bills, to handle unexpected expenses, to pay off credit card debt, or to pay for a large purchase, online loan market offers number of loan options that fit your requirements. All you need to do is good research and careful comparison work, so that you can pick up a right loan offer by the right lender and at a right price. There is stiff competition among almost all offline and online lenders, due to which their rate of interest may vary. Use loan calculators to estimate how much you can get and at what rate. Choose the loan amount carefully that you can easily afford to repay on time. Any delay in repayment can lead to late fee and penalties. This will make your loan even more expensive if extended.

Ahead of applying for a loan, it is important to have all important and complete information about a loan plan. It not only improves the chances of your loan being approved but can also help you secure a loan at a best possible rate. While applying for a loan, you need to take certain things into consideration such as your credit score, interest rate and other fees attached with the loan. By examining these criteria you can ensure what works best for you. It may also prevent you from making mistakes like selecting the wrong lender, borrowing more than you need and opting for an inconvenient tenure.

Things To Consider Before Applying For A Loan From Banks Or Online-

Maintain A Good Credit History:

A credit score is the representation of your credit worthiness, based on the history of your credit repayment. The credit score ranges from 300-900 and a score above 750 is considered ideal. A lower credit score signifies bad debt management and may result in your loan application being rejected or a higher interest rate being charged on your loan. In order to maintain a good credit history you must pay your dues on time.

Compare Loan Rates And Terms:

In order to get the lowest possible rate, you need to compare interest rates and terms on loans offered by various lenders. You can easily compare rates on various online loan comparison websites.

Assess All Costs:

In order to get a clear estimate of the expenses before applying for a loan, you must assess all costs attached with the loan like processing fee, prepayment fee, late payment fee or any other hidden fee charges. This vital information can help you manage your finances more effectively and thus you can easily decide whether the loan is affordable or not.

Consider Your Needs To Select The Right Loan Amount:

Make a list of your important needs and requirements that you want to meet with a loan. Some common purposes of taking up a loan includes address medical bills, finance a wedding, handle unexpected bills and expenses, plan a holiday, buy a car and more. Based on your needs and financial condition, you can decide the loan amount you need to borrow.

Know Your Ability To Repay The Loan:

Before you take up a loan, start preparing for its repayment. For such purpose you need to route your income from investments towards EMI payments. But make sure that your income is enough to repay the loan.

Avoid Falling For Gimmick Loan Offers And Schemes:

There can be many lenders across the market that offers artificially low interest rates or gimmicky plans. When you make comparisons and do the research, these loans often turn out to be more expensive than expected. Also, at times, they are based on floating rates of interest. This means the rate of interest may initially appear low, but as time passes, it can increase substantially.

Before you begin applying for a loan, confirm what type of loan you need. Consider as many financing options as you want to decide on the right loan type for you. You need to decide on how much money you need and need to find the right lender for your loan type. After checking your credit score you also need to check the lender’s requirements. Compare the loan offers and gather all documents and information required for loan approval. Many online lenders, banks and other financial institutions offer pre-approval. This gives you a chance to view your potential rate and loan term based on the information you have provided.

The application process may vary slightly from lender to lender. Once your loan is approved, the desired loan amount will be directly credited to your checking account or some banks/lenders will send you a check. In most cases, you are free to spend the amount on whatever expenses you would like. Afterwards, you need to make your payments on time. You can pay with a credit card, online through lender’s website, by mailing a check or by automatic payment option. In case of missed or late payment, penalties will be charged by the lender.

Bottom Line

Applying for a loan through any platform offline or online is not difficult, only their loan process time may vary. Also, to get the best loan deal you need to make comparisons which can be much more feasible through online platform. With a good research and comparison, you can able to spot a lender that will meet your needs.