Posted in: Finance, Loans

How to apply for a loan online

Applying for a loan online is one of the quickest and easiest ways to quickly secure funds that you need. The whole process of completing and submitting your application can be done in the comfort of your own home, simply using your laptop, or even your phone.

As well as being a convenient process, applying for a loan online has another key benefit. Many lenders offer a very quick turnaround on loan decisions, and if your application is successful, they will even send you the money on the same day.

Choose a direct lender

A quick google of online loans will return a lot of results. Whilst they may seem similar at first, there is one really important difference that you need to know.

Some are direct lenders, and others are online brokers. Online brokers are there to introduce you to a lender. They normally share your details with a range of different lenders.

On the other hand, direct lenders are able to provide you with a quote directly. This cuts out the middleman and can often be a more straightforward approach to take. It means that your information is not shared as widely, or with a potentially unknown number of lenders that an online broker may send your application to.

What information do direct lenders require?

The exact application process will vary slightly between different lenders, as will the speed with which they promise to process your application. However, there are some basic details that will remain the same, no matter which lender you are applying to.

Contact details: Your basic contact details are critical, as they serve as identifying information and allow direct lenders to make any financial enquiries that they may need to. This might include a credit check, although different lenders will have different requirements in terms of credit scores.

Bank account details: In general, you will need to provide the details of your current bank account, which is where the loan will be paid into if your application is approved.

Income and expenses: You will be asked to provide details of your income and your anticipated expenses. This will usually include information about any other loans that you are still repaying. This allows lenders to make a balanced decision as to whether you will be able to repay the loan, which will form the basis of whether your application is approved.

Always read the payment terms before agreeing

It should go without saying, but it really is very important that you check all of the terms and conditions before you commit to taking out a loan. It’s often tempting to skip over the long terms and conditions documents, and just tick the box that says you’ve read it. But when it comes to a loan, you should ensure that you are happy with the payment terms and understand exactly how much you are due to receive.

Even more so, it’s crucial that you know how you will be expected to pay the loan back. It is also important that you understand what the penalties are if you are unable to make your repayments. As with any loan, the penalties for failing to repay can be high, and it is essential that you are confident that you have enough income coming in to be sure you can make the repayments in a timely manner.