There are countless loan forms and lenders online today and therefore it can be difficult to get out and find exactly the loan that suits you best. We would like to help you with this article.
Here on the site we have listed various advantages and disadvantages of online loans, so you can quickly and easily create a good overview.
Benefits of online loans
There are many benefits to borrowing online that you cannot get through a regular bank loan. Above all, online lending is simple, fast and convenient.
3 Benefits of Online Loans:
- Simple application process
- Borrow to whatever you want
- Quick payout
One of the biggest reasons why online loans are so popular is that you never have to disclose what to spend your money for. You can actually use them for exactly what you want.
Many times there are relatively small amounts of loans, compared to bank loans. Therefore, lenders do not need to know what to spend the money for.
Online loans are also unsecured loans, which means that you do not need to provide a security for your loan, such as your home or car.
Another advantage is that the application process is simple, smooth and ready in just a few minutes. With almost all lenders, you will receive an answer to your application on the same day or the next weekday. Some lenders specialize in extra fast processing time and there you can get answers within an hour.
Online loans are not provided by banks, but by other lenders and credit institutions that specialize in online loans and therefore have a faster process than a regular bank.
If your application is approved, you can sign with BankID or E-identification online and you have the money in the account within a few hours if you and the lender have the same bank. If you do not have the same bank as the lender, it usually takes a maximum of 1-2 days.
Some lenders also offer weekend payouts .
Disadvantages of online loans
As with any other loan, there are also things to be aware of before you take out an online loan.
3 Disadvantages of Online Loans:
- Often high interest rates
- Expensive if you can’t pay back on time
- Often short term
Lenders make money by giving you loans and some want to make a little more money than others. They make money through interest and fees that you pay on the loan.
Therefore, you should pay attention to the interest rate and the fees to pay, before choosing which loan you want to take out.
The reason why the interest rate can be high is because the lender takes a high risk by lending money without collateral and therefore has to compensate for this risk by raising the interest rate.
However, there are lenders where you can borrow without interest if you repay within 14-30 days, check your options if you know you do not need to borrow for a longer period than that!
Many online loans have a relatively short term and it can be very expensive if you do not repay the loan on time. Be sure to match your repayments and if you don’t have the opportunity to pay for a month, call the lender as soon as possible so you can come up with a solution.
The reminder fee and the interest rate on interest are fees that are often very high. Therefore, be sure to check the maturity of the loan so that you are sure that you will be able to repay the loan.
Who can take an online loan?
It’s almost daunting how easy it is to take an online loan. This is, as mentioned earlier, because there are rarely any collateral requirements for the loan. Thus, the lender does not value whether the loan is “profitable” or justifiable.
However, there are some criteria to be able to take an online loan. You must be of a legal age, ie at least 18 years, but some lenders set higher age requirements of 20 or 25 years.
In addition, you must usually be able to document and show that you have a fixed income and thus have the opportunity to actually pay off the loan in the end.
Other requirements are that you must be registered in Sweden, have Swedish mobile subscriptions and in some cases also have Swedish citizenship.