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Online Loans: The Good, The Bad and The Ugly

Banking, Debt · November 16, 2011

With the advent of the computer and the internet, it has become possible to sit at home and shop. Although it is very convenient, it is also fraught with danger.

Less hassle: Apart from the purchasing of physical items, online loans are also available. You don’t have to go into the bank and stand in a line anymore to apply for a loan, as the internet is right there to do it.

Short time frame: If you need cash quickly, getting an online loan will do it for you. No need to wait for a week or more to get approval.

Easy approval: The criteria of online lenders are often lower than those of formal institutions. Even if you have a bad credit record, a loan might be approved for you.

High fees and interest rates are what you can expect from most online loans.

Online loans require payment in a shorter period than what a bank would require. Make sure your finances will allow for this repayment.

The terms and conditions of some online loan sites are unclear and you may find yourself in a high-risk situation. Some conditions are often intentionally hidden since they don’t want you to know about them.

One of the most dangerous things to do on the internet is to supply your credit card or other bank details online. Malware and spyware can pick up on your details and use it against you. If you do not want to fill in those details online, go to the lender directly and do the paperwork in their offices.

If you apply for a loan to a bank or other financial institution and you go to the site of that specific institution, you are reasonably safe because they have secure sites.

The sites of these well-known and regulated companies also offer online loans.

Many other online loan sites are also on offer. If you were using another site, it would be possible to ascertain whether they are regulated. Rather take the trouble to check up on them.

If you are in need of short-term cash, you may consider a payday loan. These loans will lend you money until your next payday.

They are not to be confused with long-term loans; they are for the here and now only. Maybe a family member fell ill and you need extra cash or a baby was born into the household and that called for additional expenses.

Whatever the reason, payday loans are available and can be convenient. Treat them for what they are – cash for an emergency to be paid back at the next payday and probably never to use again.

Because it is a short-term loan, the interest rates will be higher than that of a longer term one. The lender may also charge you a fee for their services.

Holding the cash in your hand will give you peace of mind for the rest of the month but just remember that it comes at a price. Online loans might be a quick fix but would never be the answer for sound financial management.

This post is brought to you by Moneysupermarket.com

Filed Under: Banking, Debt Tagged With: loans

A Blinkin

Hunter, aka A. Blinkin, is the blogger behind Funancials. His experience in banking, lending, payments and investments has earned him the title of "Personal Finance Guru." In addition to helping people with their finances, Hunter enjoys crunchy tacos, open mouth kisses from his 2 baby boys and writing in third person.

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Hunter, aka A. Blinkin, is the blogger behind Funancials. His experience in banking, lending, payments and investments has earned him the title of "Personal Finance Guru." In addition to helping people with their finances, Hunter enjoys crunchy tacos, open mouth kisses from his 2 baby boys and writing in third person. Read More…

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