What are Personal Loans?
Sometimes you need to borrow money to bridge a gap between your financial needs and the resources at hand. The
most attractive and sensible option to accomplish goals like home improvement, debt consolidation, paying off medical bills, refinancing credit cards, etc., is to get a personal loan. A personal loan is a lump sum of money borrowed from a bank, credit union, or online lenders but online lenders offer better interest rate relatively.
Types of Personal Loans
A home loan or car loan is a secured loan meaning that you have to provide collateral to get a loan and the lender may auction your property in case of a default. Contrarily, unsecured loans are not secured against any collateral such as jewelry, or any other personal property. So, in case of a default, you don’t have to worry about losing your asset but these loans tend to come with comparatively higher interest rates. Most personal loans are unsecured loans that come with lucrative offers like flexible use, short to moderate term repayment plans, and quick funding. So, if you want to enjoy all these benefits and many others, find a personal loan at MatchFinancial.
How does it work?
The application process is quite simple and takes not more than ten minutes. Shortlist some lenders after extensive research about each lender, and submit a prequalification request, if required. Choose one lender from shortlisted candidates based on the best overall deal offered and fill out their online application form. Provide any documents required and e-sign the loan agreement. You will receive your funds in your bank account within 24 hours to three days depending upon the lender’s policy. While choosing the lender and loan type, you must consider key factors such as loan amount, interest rates and additional fees, the term of the loan, and repayment structure.
Basic requirements
Each lender has different criteria however the basic requirements for borrowers are almost the same and are:
- Canadian residency
- The borrower must be of 18+ years
- A credit score, ideally above 650
- A credit history
- A Canadian bank account
- Proof of income or employment
Pros of Online Personal Loans
Process is convenient
The application process is convenient and you get approved within minutes or hours. You can apply for an online personal loan anytime from anywhere as long as you have a mobile phone, laptop or tablet, and an active internet connection. The borrower doesn’t have to submit the documents physically which is mandatory when applying for a bank loan. Just upload a soft copy of the required documents on the lender’s website.
Online tools
There are online tools like Eligibility Calculator and EMI calculator that provide assistance to the borrowers and make the process easier when applying for an online personal loan. Merely by providing basic personal and financial information you can get an idea not only regarding your loan amount and interest rate but also about monthly installments and tenure of the loan.
Quick funding
Offline loan application approval and funds disbursal processes are completed manually and are time taking and patience-testing. Whereas every single step of online loan applications is processed through machine-made programs and the process is always way faster.
Compare your options
When you apply for an online personal loan you can compare offers from multiple lenders and then choose the one which suits your financial requirements and resources. You can never get this kind of opportunity when applying for a personal loan offline unless you physically visit different banks and lenders one by one, which is tiresome and time-consuming.
Loan aggregators
An online loan aggregator is a search engine for loans where different lenders are listed side by side so you could easily compare your options without providing any personal information. But if you search for loans via online lenders, they will ask for your birthdate, bank statements, phone number, SSN, etc. and then sell it to multiple lenders who will contact you directly. Online loan aggregators such as MatchFinancial promise you online security and do not require your personal information and empower you to search for online loans without disclosing any personal information.
No additional charges
When you apply for an offline personal loan, there will be agents involved in the process who may ask for some hidden or additional charges because every step is completed manually. The online personal loan application process is completed online without any physical involvement. Hence ruling out the involvement of third-party, so there is no one to ask you for additional charges.
Wide variety of credit scores
Most of the online personal loan lenders offer loans to borrowers with good or fair credit score and borrowers with excellent credit scores can get interest rates as low as 5%. That said, even if you have a bad credit score or no credit, you can still apply for an online personal loan. Bad credit loans come with comparatively higher interest rates and strict repayment plans.
Cons of Online Personal Loans
Debt Cycle
If you do not consider the pros and cons before applying for a personal loan or any type of loan, especially if you have a bad credit history, you may find yourself in a debt cycle which is quite difficult to break.
High fees
Despite having excellent credit, some lenders charge certain fees such as origination fee, closing fee, late payment penalties, etc. which could be as high as 9%. So it is advised to ask the lenders to give detailed information about fees and penalties while shopping for an online loan.
Beware of the scammers
The online personal loans are associated with a high risk of the scams. So, be vigilant during the whole process and do not pay any upfront fee as there isn’t any. If any lender offers no credit check on the loans, do not believe because any such offer should be a red flag. Federal Trade Commission terms any such offers as an advance-fee loan scam.
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