Loan apps have been growing at an alarming rate over the past few years. The process of taking a loan keeps getting easier. In a few clicks you could have access to certain amounts. There are many pros and cons of using loan apps, We’ll be discussing some of these advantages and disadvantages in this article.
What are online loans?
Online loans are quick and convenient loans that can be availed online without having to go through a rigorous screening process. Unlike regular bank loans, you do not need collateral to secure your loan. It only requires minimal documents for identification purposes. These loans are approved quickly without the need to visit the lender’s office. The amount is transferred to your bank account right away.
Online loans vs. bank loans
Bank loans are traditionally used for bigger items like home or auto loans. This means that the approval process is stricter and requires more documents to ensure a person’s ability to repay a large amount.
Online loans, on the other hand, get approved in as fast as 24 hours and only require documents for identification. However, the amount that a person can loan is much less than what one could get if they apply for a loan in a bank.
Advantages of Online Loan Apps
- You do not need to provide collateral property to secure a loan.
- It is fast and easy to get, as long as you are 18+m you have a good change of taking a loan.
- You can easily compare offers from multiple sources and select the best option for you
Disadvantages of Online Loan Apps
- If you lack discipline, you can easily get addicted to using loan apps and this can keep you in debt for a long time.
- Online Loan apps usually have an extremely high interest rate
- There is a risk of hacking and you could be a victim of Internet fraud.
- The size of loan you can take is usually very limited in size.