The lending landscape has been undergoing a rapid change and growth in recent years, driven majorly by the risk aversion and unwillingness of banks to offer small-business loans. According to Wall Street Journal’s Harris Poll, 19 percent of owners of small businesses had to delay investment since they could not get a loan. Nowadays, most people and small businesses have a difficult time getting loans from banks and traditional lenders, particularly if their credit score is poor. Luckily, online lending has become a reliable alternative to the conventional bank installment loan.
Online lending has turned to be a source of promise for people who are looking for small loans to cater to unexpected short-term expenses. It is also suitable for small businesses that are planning to invest and grow. The Harvard Business School reports that small traditional bank loans reduced by 3.1 percent back in 2014 while small online loans increased twofold. But how can loan applicants capitalize on the benefits associated with the online lending process? Let’s discuss actionable tips for applying for small loans online and provide the best sites and apps.
- Put your finances in order
Although online lending offers more flexibility compared to traditional banks, you should avail solid financial records to confirm that you can repay the borrowed money. If you are a small business owner, ensure your business is registered and in compliance with the tax laws.
- Leverage online accounting software
Digital accounting tools such as FreshBooks, Xero, and QuickBooks can be instrumental when it comes to managing your finances. With your financial information available digitally, sites such as Snabblån.nu, can help you quickly get loans that have the lowest interest rate and excellent terms. Availability of your information online also increases the likelihood of lenders approving your loan application.
Conduct thorough online research to identify the loan that suits your needs
Examine the existing market interest rates. Once you know your credit score, perform some basic calculations to identify interest rates that seem affordable to you.
- The loan terms vary from one lender to another. Thus, ensure that you make thorough comparisons. For instance, some lender may offer loans that have lower interest rates and longer repayment period. These lenders could hit you with a hefty fine if you pay off the loan too quickly. If you can afford to pay off a loan faster, then go for a short-term loan with a marginally higher interest rate. Compare interest rates in different online lending sites such as Lending Club, Sofi, and CircleBack Lending.
- Outsource the services of sites to identify reputable national and local online lenders. Compare different personal loans and choose one that attracts slightly lower interest rates.
How to Borrow
The procedure of applying for a loan online is similar to that of applying for a loan anywhere else. However, getting a loan online will perhaps feel easier. In apps like Freedom Plus and prosper, you will have to provide your financial information. To get started, pick your preferred lender and complete the application process. It should only take you around 10 to 15 minute to be through with the application.
With the growth of online lending marketplace, getting small loans to deal with unexpected temporary expenses has become easier. The above tips can help you select the best online lending site or app and get a loan that addresses your needs.