With the “Age of the Internet” having taken over all facets of our lives, we are all taking advantage of this quick and hassle free way of doing everything, from the comfort of our own homes. Company and client face-to-face interaction is quickly becoming a thing of the past and online loan applications are becoming more commonplace. But when dealing with finances, there are still a number of people who are scared to apply for loans online. If you are one of those people, or if you prefer to make informed decisions before diving in head first, read on. We have compiled a list of 10 tips to help you overcome that fear and make a more informed choice, when applying for loans online.
“It’s simple”, we say, “just Google it!” And Google obligingly offers up a wide variety of fast online loans, over multiple pages, for you to choose from. It is, quite simply, mind blowing. The questions going through your head are: “How do I choose the right loan company, from the varied options I am being confronted with? What are the important factors I should look into when making my selection among the loan companies out there? How do I make this less scary? What should I do?”
Start by following the tips below, thereby weeding out those you definitely don’t want and zooming in on the ones that meet your requirements, until you can identify your partner in financing your needs.
Online Loans Tip #1: All micro-lenders in South Africa need to be registered with the National Credit Regulator. This means that they are reputable loan providers and their fees and interest rates are regulated. Look out for the NCR badge or proof of registration (like the NCR Registration number) on online loan websites.
Online Loans Tip #2: Do not use a website that requires you to pay a fee before you are able to apply for the loan. This is how con-men and loan sharks make their money – and how you will lose yours. They take your money and you will never hear from them, or your money, again.
Online Loans Tip #3: Make sure that the online loan website has contact details. Besides ensuring that you will be dealing with a genuine, reputable micro-lender, you may need to follow-up on the outcome of your loan application or speak to a consultant about your account. You could even test call the number to ensure that it is genuine, to allay any suspicions you may have.
Online Loans Tip #4: First decide what your needs and priorities are, before you shop for your online loan. Are you looking for a short-term payday loan, to see you through until payday, or are you contemplating a more substantial, long-term loan, which will be paid off monthly. Some websites only offer one or the other and may not offer the amount you require.
Online Loans Tip #5: Always do the math. Ensure that you check what your estimated repayments would be to confirm that you can afford, and budget for your loan. This can also give you a better idea of the duration you should select for paying off your loan. A shorter term with higher repayments but less overall interest, or a longer term with more manageable, lower monthly instalments. Design your loan to suit your pocket.
Online Loans Tip #6: How soon do you need the loan? Depending on what you require the funds for, you may be planning a long term project, or looking for urgent funds. Ensure that you read the fine-print and that you will not have to wait days and weeks for approval, and that once your loan is approved, there will be no delays with your receiving the money.
Online Loans Tip #7: Always be honest. In these tough times, many people have, for one or another reason, a bad credit record. It is always better to be upfront about this when completing your online loan application. In this internet age, it is impossible to hide this and it is far better to have declared it openly, than to have the micro-lender find that you have hidden the fact. Your chances of having your loan approved are better this way.
Online Loans Tip #8: Once you have an approved loan, remember to keep your details up to date with your financing partner. This will ensure that you continue to receive statements and any other correspondence, and are kept up-to-date with any new products or offers. Also, if you have long term plans and intend to apply for additional loans in the future, it will simplify and possibly speed up the process thereafter, especially if your bank details have changed.
Online Loans Tip #9: Form a partnership with your loan provider. Our needs are wide and varied and although we all would prefer not to get into debt, this is sometimes unavoidable. Some loan companies will offer lower rates on your future loans, as you develop a track record with them and improve your credit record. So, ideally, if you have chosen wisely the first time you apply for a loan, your online loan website could become your favourite.
Online Loans Tip #10: Fixed instalments and interest rates. Not all micro-lenders offer a fixed interest rate and consistent instalment amounts. This makes it impossible to budget and can mean that you end-up paying way more interest on your loan than you should be. Check the website for any comments about this to ensure that you do not fall into this trap. The simpler the website is, the less likely there are to be hidden clauses and fancy legal footwork, designed to lure unsuspecting victims.