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Some of the newest, most innovative personal loan lenders are online. They join big names in the personal loan business, like Discover and Goldman Sachs. Here, we'll discuss how online personal loans work, the pros and cons of online loans, some of the best online lenders, and alternatives to online personal loans.
An online lender streamlines the process of getting a loan. The time it takes from application to funding is typically a matter of days (even faster with some lenders). And you can complete the entire process from the comfort of your living room. If you're looking for an unsecured loan (one that doesn't have collateral a lender can take if you don't pay), an online lender offers a fairly easy process.
Here's how it works:
Like a traditional lender, an online lender offers lots of options to help you customize your borrower experience. For example:
Choose your repayment term. If you need to keep your monthly payment low, choose a longer repayment term. If you want to save money on interest payments, choose a shorter repayment term.
Pick a loan that fits your credit score. Whether you have excellent credit, bad credit, or something in between, there's a lender that specializes in loans for you.
Opt for automatic payments. Not only will autopay ensure that all payments are paid in full and on time, many lenders offer an interest rate discount for borrowers who sign up for automatic payments.
Decide if you want to consolidate banking services. If you want a savings and checking account with the same financial institution, some online lenders offer banking services in addition to personal loans.
Because there is no one-size-fits-all financial decision, it's important to weigh the pros and cons. Here are some of the great and not-so-great things about an online personal loan:
As with any personal loan, you want to work with a professional, reputable lender. These four lenders are our 2020 Personal Loan Awards Winners:
If you look around and decide now is not the right time for you to take out an online personal loan, you have options. Here are two.
If you have a good credit score, you may qualify for a credit card with a 0% promotional APR. The best 0% intro APR credit cards typically offer the cardholder 12-18 months to repay the debt without paying interest.
If you're a member of a credit union, you're considered an owner (or shareholder). As an owner, you have access to low interest rates for loans and excellent terms.
Although online loans are a relatively new phenomenon, millions of people have borrowed money from the convenience of their homes. If you're in the market for a loan, it pays to check what online lenders have to offer.
Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.
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