Online loans are one of the most used tools in urgent cases where liquidity is needed. Despite this, there are still many consumers who have reservations when hiring these products. Normally, this is due to ignorance of its operation and its conditions. For that reason, in this article we are going to deepen in this respect.
Online loans: main features
Something very important that you should keep in mind is that the characteristics of this type of financing depend on the company that offers it. That is, each financial institution imposes its rules, something that is reflected in the characteristics of Internet loans.
However, there are a number of issues that are common in virtually all these loans. Let’s see.
1. Speed in the management and availability of money
The first one is that the receipt of money is much faster. When we think of a traditional loan, the first thing that comes to mind is waiting. Before receiving the money you will have to meet with the bank staff, explain what the money is for, fill out a form or application and wait a few days while studying the proposal. After this, we will have to return to the bank to sign the loan contract, if they accept it, and then it may still take a few days for the money to be available.
All those waits are eliminated in the digital environment. Obviously, this is because in the Internet ecosystem what counts is immediacy. Therefore, having to wait several days or even weeks to receive the money that we have requested is totally out of place.
2. Lower quantities
On the other hand, it is important to note that the amounts that can be accessed through online financial products are always lower. While in a bank you will have access to a financing of 50,000 euros, on the Internet the figure is much lower.
Most companies offer up to 1,000 euros, although it is true that more and more financial companies include among their products higher loans that reach 5,000 and 10,000 euros. Again, everything will depend on the conditions of the entity.
3. Reduced return period
We must pay special attention to this factor. While traditional loans have several months to settle the debt, the Internet changes. Depending on the amount you request, the return period will move between 1 and 3 months. For large amounts exceeding 5,000 euros it is possible to find repayment terms of 6 months.
This can be interpreted as an advantage or as a disadvantage. If you focus on the positive side, a short repayment term will make you pay off your debt sooner rather than becoming something perpetual that will weigh on your personal finances for a long period. But if you look at the negative part, you will agree with us that, in many cases, it is a lot of money to return in a very short time, which can drown you financially.
It is often intuited that these measures have been designed so that people only resort to this type of financing when they know that what they are asking for is money that they will receive insurance in a short period of time. However, everything will depend on your circumstances and needs. Do not forget to keep this in mind.
4. Less strict requirements
One of the main reasons why many consumers refuse to go to a bank to get a loan is the hardness of their requirements. Virtually no bank will grant you financing without having a fixed payroll of more than 600 or 800 euros. On the other hand, it is very possible that they demand an endorsement, something that bothers many consumers, since they have to involve family members or people close to the family in their affairs.
Another of the less popular issues that banks require is the possession of property to guarantee the loan, which also puts many customers in a difficult situation. In short, most of the requirements imposed by traditional financial institutions do not satisfy their clients. Therefore, more and more people are opting for Internet financing.
The first thing you should know is that no credit company on the Internet is going to ask for a guarantee. That is, you will not have to compromise family or friends in case you need a loan. On the other hand, they will not demand you to have properties either. Only in very few cases, in which the financing that is going to be granted is very high, is it required to have a vehicle with which to face the payment in case of insolvency.
It is interesting to know that you will not be required to have a payroll either. They will only ask you to prove the perception of a regular minimum income, but these do not have to be a payroll as such or a pension. Therefore, it is much easier to access loans on the Internet than traditional ones.
5. Higher interests
In line with the issue we mentioned earlier, it is interesting to know that as a counterpoint to the more lax requirements, Internet entities charge a much higher interest. This question should be present and study it to know if it makes up for asking a loan on the Internet really.
Given that online loans represent a greater insecurity for the credit institution, the interest charged is higher to ensure the return of money. At the end of the day, having few requirements supposes a greater uncertainty that the client will return the money. For this reason, they charge higher interest rates than those that do not get or that are delayed more than the account.
On the other hand, default interest and other charges related to non-payment are much higher than in normal credit institutions. What is interesting about this for consumers is that many companies that offer loans on the Internet offer the first for free. That is to say, that in the first loan that you request, you will not have to pay interest.
Therefore, you can exhaust all the loans of the different companies without paying any interest. In addition, based on your ability to respond to the return of money each entity will score and impose a higher interest or another.
6. They do not charge commissions
Finally, we will emphasize that credit companies on the Internet do not charge any commission. That is to say, you will not have to face the payment of opening fees, the ones that you charge in the banks for studying your request or any other added payment that at first may be unclear.
On the contrary, you will only return the amount you have paid and the amount that the interest applied. No more no less.
Requirements to access online loans
Another very important factor that must be taken into account in online loans is that the requirements are much more lax. Although we have already explained this in the previous section, this time we will go a little deeper into these conditions that you have to fulfill in order to access financing on the Internet.
1. Be of legal age and reside in Spain
This is an indispensable requirement that practically all entities impose on their clients. If you are over 18 years old, you will be able to apply for a loan online. It will also be necessary for you to have a residence in Spain, since in this application you will be asked to contribute an address.
In case you do not reside in Spain, you will not be able to access this type of financing. The same as if you are a minor. However, both requirements are very easy to comply with.
2. Have an identification document in force
It is important that you have your DNI or NIE in force when you are ready to ask for the credit. You must provide a photocopy of your request along with your request. Therefore, this must be valid and not expired to obtain the acceptance of the financing.
3. Be the holder of an online bank account
So that you can deposit the money you have requested in an account, you must be the owner of it. On the other hand, the ideal is that you have access to digital banking, since the entire procedure to achieve this type of financing is done through the Internet. Therefore, you will have to check that everything is correct at the moment in which you make the deposit of the amount you have requested.
4. Have a mobile line and an email
Again, two very easy conditions to complete. Nowadays, who does not have a telephone line and an email? The need to provide this information is none other than to offer facilities to the company in case they want to contact you. In case there is any problem or they have to communicate any changes, the ideal is to have a phone or an email where to find you.
5. Have solvency
Contrary to what many people think about this type of financing, it is necessary to demonstrate that you have solvency. No company is going to offer you financing if you can not face the return of it. It is true that there are products such as loans without payroll in which they will not require a fixed payroll every month.
However, you will have to prove another series of income such as a pension, an unemployment benefit, proof of income as self-employed or the perception of any other type of financial aid. Obviously, if you have a work contract and a regular payroll, better than better. The point is that if you do not have it, you will have to credit other income.
Advantages of Internet loans
Now that you know all the information about the loans on the Internet, it is time for us to focus on its advantages.
The first thing you have to consider is the speed both in the study of the application and in the reception of the money. This is a huge benefit for those in a position of urgent need for solvency. Therefore, you must bear in mind that if you are looking for speed, the best products are on the Internet.
2. Good offers
Another important issue is that Internet credit companies, having a lot of competition, are continually making offers. For example, they will offer you a reduction in the interests or the elimination of them, they will increase the margin of financing and a long etcetera of actions to attract you as a client.
In this way, thanks to the competition that exists, you can take advantage.
3. Little paperwork
The paperwork that you will be required to request an online loan will be very small or practically nil. With a photocopy of your ID, a receipt of your bank movements and a copy of a payroll or collection of pension or help will be enough to grant you the credit.
4. There is no small print
What credit institutions look for on the Internet is that customers know what they are asking for when they request this financing. Therefore, they explain everything perfectly and the contracts do not have small print with hidden conditions that involve unexpected charges for the consumer or a change in loan conditions.
Compare and get the most benefit
We can not conclude this text without emphasizing the need to compare between the different online loans available on the Internet. The digital environment has opened the doors to a multitude of companies that offer different products. Therefore, it is important to compare each of them to find the one that most benefits you in terms of their conditions. So, when comparing, do not hesitate to count on us.