What you need to know about online loans
Sometimes there is nothing you can do, no matter how hard you try to move it down the list of options available to you, taking out a loan can be the fastest solution to your financial problem. You might be thinking of asking that long time friend of yours, but asking people you know is embarrassing.
Online loans are an easy and convenient quick fix for those looking for cash and loans. Most credit providers offer these types of loans nowadays. You can apply online in minutes and have the loan approved on the same day if you meet the risk criteria. In most cases, you won't have to visit any loan shop, as you can complete all the loan processes online, or by email.
Once your loan is approved, you can expect to have the money deposited in your bank account in as little as one business day. (Note: that delays may occur, related to the processing of your application, or in the case of public holidays and weekends.)
What is an online loan?
An online loan is a type of loan that is not directly from a traditional bank, but from an alternative lender that operates online. Online loans can be personal loans, payday loans, or business loans, depending on the purpose and terms of the loan.
Online loans are convenient and fast, but may have higher interest rates and fees than bank loans, but interest and fees gets regulated by the South African National Credit Regulator, lenders and credit providers can't just charge you as they please.
Some of the benefits of online loans are:
- You do not need to provide collateral property to secure a loan
- You can access your loan faster and easier than from a bank
- You can choose from a variety of lenders and loan options
- You can get flexible repayment plans and discounts
- However, online loans may also have some drawbacks, such as higher interest rates, fees, and risks of fraud or scams. You should always compare different online lenders and read the terms and conditions carefully before applying for an online loan.
How to spot online loan scams
To know if an online lender is legitimate, you should look for some signs that indicate a loan scam, such as:
- Guaranteed money without checking your credit record
- Unsolicited loan approval that you didn’t apply for
- Request for immediate payment or upfront fees before you get the loan
- Aggressive sales pitch that pressures you to act fast or sign anything
- Shady background or lack of contact information
- Many consumer complaints or negative reviews online
- You should also check the credit provider’s credentials and make sure they are registered with the National Credit Regulator (NCR) in South Africa.
- You can verify their registration number and contact details on the NCR website or by calling 0860 627 627. You should also check if they have a secure website. If you have any doubts or suspicions, do not agree to anything and report the scam to the NCR or the police.
The advantages and disadvantages of online loans
Online cash loan features vary from lender to lender, but you will encounter similar advantages and disadvantages with various online lenders.
ADVANTAGES:
- Convenience: A fast online application process. Can be complete on your computer or smartphone as long as you can connect to the internet.
- Soft check: When you apply most online lenders will only run a soft credit check when you are shopping around and will only do the hard credit check once you have decided to accept the offer. Which means that shopping around won't cost you and will give you a good idea of what is on offer for your current risk profile.
- Credit Score: Online lenders base their lending decision on more than just your credit score. That is why they will ask you for a bank statement to assess your monthly financial behaviour. An assessment like this gives you a better chance of getting the loan, helping you out if you are new to credit or if your credit score is below average.
- Quick and Simple Application: An online loan application takes minutes to complete. With the services that Mr Cash Loans offer, you can have loan offers from multiple lenders after filling out a single application form. This will give you the freedom to continue with your daily life.
- Debt Consolidation: If you qualify, some online lenders will be able to assist you with consolidating your credit into one instalment. They will give you an option where they settle your debt by paying your creditors directly. In the short term, this will help you free up more of your budget. You win and your credit load will be less.
- Cost: Since the National Credit Act came into play in 2005, online lenders and banks all charge more or less the same when it comes to unsecured loans as it gets governed by the NCA and gets enforced by the National Credit Regulator. That is why you need to check that the online lender or any credit provider, for that matter, is a registered credit provider.
DISADVANTAGES:
- More expensive than: Most online loans are unsecured loans, which means it is more expensive than a secured loan that gets secured by collateral. If you are in good standing at your bank, your bank can also offer you a personal loan with a lower rate, as they have a track record on you.
- Can take longer: The processing of an online loan is faster than traditional bank loans. There are exceptions, especially, if your documents are not correct or if the lender is unable to confirm your current standing or documents, it can take days to complete. The best solution to this is to supply the credit provider with documents exactly as requested from you to avoid delays.
- Loan shark warning: Reputable online lenders compete with loan sharks for your attention online. Reputable lenders will check your credit rating and will also do an affordability assessment to establish your ability to repay the loan. An online lender that advertises "No credit checks" or "no-affordability" loans is a no-no. If you see these terms, you must know that you are dealing with a company that do not carry your best interest at heart. Always be sure that you only deal with NCR registered Credit Providers.
What do I need for online loans?
The online loan process may vary depending on the lender and the type of loan, but generally it involves the following steps:
- Fill out an online application form with your personal and financial information
- Credit in South Africa from legal credit providers are subject to credit checks and credit history checks.
- Get pre-qualified or see personalized rates based on your credit score and income
- Choose a loan offer and submit any required documents, such as proof of identity, income, and bank statements, proof of address
- Wait for the lender to verify your information and approve your loan
- Sign the loan agreement and receive the funds in your bank account
- The online loan process can take from a few minutes to a few days, depending on the lender and the complexity of your application.
- You should always read the terms and conditions of the loan carefully and ask questions if you have any doubts.
Completing an online loan application on the internet is quick and simple and once all the checks are completed and your loan is approved, you can normally have the loan in your banking account within hours.
Please note our Basic Criteria and Required documents for a online loan.
Just some of the basics: You need be permanently employed for more than 6 months, you also need to be older that 18 and younger than 60, with your own bank account, that your salary gets deposited into and you need to have access to email and your own cellphone number.