Borrowing money is hard. Various banks and financial institutions have been in existence for centuries, furnishing people with financial aid. With their dedication, loyalty, and transparency, they gained the trust of borrowers, especially whenever they needed a large amount of money. Banks and mainstream lenders, however, follow strict criteria when it comes to the approbation of a loan application.
You must ensure that your credit report is stellar. Banks do not entertain applications from subprime borrowers, and they provide traditional loans, in other words, secured loans. Normally, they provide personal loans and secured loans, and they are all paid down in instalments over an extended period of time.
However, if you are looking to borrow a small amount of money to meet emergencies, they would not lend you money. Here comes the role of direct lenders. Online lenders are much more flexible than traditional banks when it comes to lending money. Not only do they accept applications from subprime borrowers, but they also provide fast loans.
Borrowing money from online lenders is actually quite easy. Here is how borrowing money from online lenders is so convenient:
- Online application
When you borrow money from online lenders, you have to fill in the application form online. Whether you apply for quick cash loans or long-term loans, you do not have to undergo long, tortuous, and complicated application forms.
Most of the lenders require you to provide only your contact details. As far as income details are concerned, they expect you to submit a bank statement from the previous three months or pay slips, based on which they decide on the lending amount. Since you have to submit the application form online, you do not have to wait for days to hear from your lender.
- Instant approval
The approval time matters the most when you require urgent funding to meet the urgent financial expenses. Banks do not approve small amounts of money, and the loans they approve have a longer turnaround period. They take at least of two days to complete the process. Of course, you cannot wait for a couple of days when you need money for unexpected expenses. Here comes the role of online lenders.
They use AI algorithms to shortlist multiple applications. It is a very quick process, takes only a couple of seconds. The whole process consumes a couple of hours to complete that involves running an affordability check. Once the whole process is finished, money is transferred immediately. Instant approval reduces your stress especially when you need money to meet emergencies.
- Subprime borrowers are accepted
Banks do not accept applications from subprime borrowers. If your credit score is bad, you will most probably be refused a loan. If somehow you manage to get a personal loan or a secured loan such as a mortgage despite a poor credit rating, they will charge you high interest rates. If you are applying for a mortgage with a bad credit score, you will have to arrange a bigger deposit size, too.
Fortunately, lenders are flexible with subprime borrowers. While banks do not provide small loans at all, online lenders sign off on loans despite bad credit scores. You can easily get the nod from them regardless of your credit history as long as you need money for emergencies. As far as long-term loans are concerned, your chances of getting approved are high compared to the approval rate from banks.
- Flexible repayment terms
Banks and traditional mainstream lenders are quite rigid with repayment terms. For instance, if a personal loan worth £5,000 is to be paid down in 10 fixed instalments, they will stick to this repayment term regardless of your income sources. Banks generally emphasise your repaying capacity rather than providing you with personalised repayment terms.
The loan providers are more flexible when it comes to offering loan terms. Small loans are required to be paid off in fell one swoop. Normally, the repayment length is not more than 14 days. However, depending on your repaying capacity, they might offer you a weekly or bi-weekly instalment so you do not feel the burden of a lump sum payment.
Likewise, when you are to borrow a large amount of money, lenders decide a repayment term based on your repaying capacity. For instance, if there are two borrowers who borrow up to £5,000, they both will be offered a different repayment term. One might have to pay down the debt in six months, while others might have to pay off the same amount within nine months. It will be according to your income and other regular or irregular costs.
Flexible repayments make it much easier for you to manage debt obligations. It prevents you from falling into an abyss of debt.
- Support when your financial condition is changed
Banks have strict criteria when it comes to collecting funds. You have to abide by the terms and conditions they have set. However, direct lenders are a bit more flexible. For instance, if you have borrowed a large amount of money and your financial condition has turned upside down, you can ask your lender to change the repayment term. You just have to contact them before you fall behind on the payment.
Lenders will measure your financial condition carefully and then decide on revised repayment terms. You can also choose a minimum repayment plan if you are unemployed. Online money lenders provide as much support as they can when your financial condition is turned upside down. This helps you stick to payments without fear of falling behind on payments.
The final word
Borrowing money rom online lenders is extremely convenient. Unlike banks, they offer small emergency loans and accept applications from subprime borrowers, too. They can also provide you with flexible repayment terms.
You can get support from them when your financial condition changes. While online lenders provide some convenience, borrowing money from them is also expensive. Therefore, it is essential to go for borrowing when you confident to repay as per the term assigned to you.
