Sometimes, you might be in a pinch and you might need a loan. To get a loan online, you will need to know few things we are going to talk about in this article.
The good thing about an online loan is that they are available with a single click of a button. Basically, you can get a loan online with the comfort of your home just browsing and clicking online.
Of course, there is a bad side to all of this comfort. These kinds of loans are called payday loans and they can be very expensive. You can end up with more trouble that with what you started.
So before we get started, consider this. You have to be absolutely certain that you can pay off the bills on time, before even considering a payday loan.
How to get a loan online?
Well, the first thing you should do is do an extensive search on the web. Once you type in some keywords that you have an interest in, you will find loads of payday companies.
The trick is, these companies usually lend smaller amounts of money to people with a bad financial situation and/or credit with abnormally high-interest rates and with strict terms and conditions.
Most of the time, your loan will often result in additional costs so you should only consider a payday loan as a last resort.
Some notes about payday loans:
- Payday loans are generally the most expensive way to get additional money although they are easily obtainable.
- Consider other alternatives, there are specialized websites like Prosper, Avant, etc. Also, you could ask your family or friends or maybe even take a credit union loan.
If you found your lender, the next thing you should do is evaluate the costs.
Evaluate the cost of an online loan
When evaluating the cost of an online loan, you have to write down all the terms and conditions and make comparisons across different companies.
Look for hidden costs, read the small print, three times if you have to. Most website will have online calculators, make sure you use them.
Here comes the bad news. Most of the payday loans have abnormally high-interest rates and average APRs for payday loans can range up to 500%. If you compare this to a credit card, the average APR is around 30 times smaller! Consider this when applying for a payday loan.
Be sure to repay the loan on time
If you already took a payday loan, your fees for late payments can dramatically increase the cost of the loan. If you can not repay the online loan you took, extra charges are added to your loan.
You should know few things as well:
- Costs of payday loans can quickly spiral and escalate, so be sure to plan out how you will pay for everything back on time.
- If you already took a loan and you can not pay it back on time, do not take another loan! Taking a loan to pay off another loan is a bad move!
What are my alternatives?
Payday loans are not always an answer, there are always tons of alternatives lying around, and I am going to name a few.
Sure, online loans can be the quickest solution to your temporal financial situation, but you should also think about high-interest rates and high APR. If you need a small amount of a loan, you should contact a credit union as they usually provide loans at much lower rates than online lenders.
Friends and family
Before looking up payday loans on the internet, why not simply ask a family or a friend first? Of course, it can be very awkward to borrow from someone you know personally, but the bad financial situation is nothing to be ashamed of.
You could also look for a co-signer.
What are the pros?
Well, you might nor be charged any interest what so ever. But it is important that you repay the loan on time as that person trusted you! Also, even if there is an interest, it is still a much better deal than an online lender.
Try to avoid the cycle of debt
Payday loans are short-term in nature and almost anyone can get them. This usually leads to people taking out frequent small loans. While they might think it is “not a big deal”, it sure is.
They become coupled by abnormally high-interest rates and the additional fees and charges associated with online loans are too much for a single person to handle.
If you want to develop yourself further (and I am sure you do) you have to break this circle of debt. People on Reddit are extremely helpful, you can try explaining your situation over there.