Online lenders make it easier than ever to get a personal loan. They offer straightforward applications and fast funding from the comfort of your home. But these loans may not be suited for everyone — especially people who prefer the in-person borrowing experience. Let’s dive deeper into how online personal loans work and a few types available so that you can decide if these loans are right for you.
How do online personal loans work?
Online personal loans let you complete the entire borrowing process online, from your computer or mobile device. You don’t have to visit a physical store location to get the money you need. Instead, you can select your loan amount, fill out an application, upload your documents, sign the paperwork, and get funded all from home. These loans often take only a few minutes to apply for and can get you funds as quickly as the same day you apply.
Types of online personal loans
There are numerous types of online personal loans available to borrowers, including:
Cash advances are short-term, small-dollar loans that can help you cover expenses until you receive your next paycheck. Many cash advance lenders approve borrowers quickly and have less strict credit score requirements, so you may not need good credit to get approved.
You can fill out an application for a cash advance online in just a few minutes. If approved, you’ll usually receive funds that same day or within 24 hours. Borrowers typically repay cash advances in two to four weeks, on their next payday.
Installment loans are short-term loans that give you a lump sum of money. You can pay back this loan in fixed monthly payments of principal and interest. The repayment period can range from a few months to a few years, depending on the lender and loan terms.
Installment lenders will likely check your credit score, but many consider other factors like your income and employment history when deciding whether to approve you. This means you may still get approved for an installment loan with poor or fair credit.
Lines of credit
A line of credit is a flexible loan that lets you borrow up to a specified credit limit. You can then pay off the amount you borrow at your leisure, and will only pay interest on the amount you borrow.
Some lenders can approve you for a line of credit in as quickly as a day. Then, you can access it whenever you need some extra funds. Many borrowers use lines of credit as an emergency fund or to cover unpredictable expenses, like home improvement projects or large medical bills.
The bottom line
If you prefer the personalized, face-to-face service of a physical branch, getting a personal loan online might not be right for you. But if you’d like to get a cash advance, installment loan, or line of credit from the comfort of home, then an online personal loan could be a good choice. These loans come with fast, straightforward applications and quick funding. Make sure you do your research to find a legitimate online personal lender and shop around to ensure you get the right loan for your needs.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.