Home Insights & Advice Getting an online loan? Things you need to consider

Getting an online loan? Things you need to consider

by John Saunders
25th Oct 21 8:54 am

Online lending companies are getting more and more popular as of late. They are trendy, convenient, and easy to use. They have streamlined processes, so their services are easy to turn to when you find yourself in a pinch.

Still, one should always take money matters seriously. A lot of services might sound too good to be true, and they are. So, before you apply for that instant online loan, here are some things you should consider.

How much you actually need

One key thing to remember before taking out a loan is your capability to pay it back. Some lenders are too convenient. Of course, proof of income is always a requirement. But some still lend despite their client’s precarious financial position. This system might lead borrowers further into debt.

This is why you always need some time to think about your options before getting a loan. Can I get by without borrowing? How much can I take out? Can I pay this back within the allotted time?

Taking out a significant loan requires personal discipline and responsibility. As much as you can, only borrow what you know you can repay. This way, you avoid going into a destructive debt spiral.

Interest rates

Include interests when planning for your loan. It will be part of your regular payments and could make or break your capability to pay. Look up the interest rates for your province. Then compare it to the interest rates of the lending companies you’re considering.

A lot of companies advertise low-interest loan rates. Make sure to read through the companies’ terms of service. It ensures that you prepare for any hidden charges they might swing at you. If you’re unsure, call a friend or ask the Internet for advice. Many would be happy to chime in and help.

Company reliability

The Internet has afforded people the tools to set up websites and businesses. Unfortunately, this has also made it easier for people to scam others.

This extends to online lending companies. Some attract people with rates that are too good to be true but never actually deliver. Others bank on the fact that most users don’t read the fine print and sneak in hidden charges to their loans.

You don’t want to fall victim to these. Protect yourself and your hard-earned money. Below are a couple of red flags to look out for:

  • There is no clear privacy policy or terms of service document.

Any legitimate lender should have relevant legal documents available on their website. In most cases, these are their terms of service and privacy policy. Keep safe and check out these documents before making any transaction with them.

In them, you can find what they can and cannot do with the information you provide. These will also contain the company’s fee policies and what services you can expect from them. These documents reveal what you agree to once you use their service.

  • They pressure you to take a larger loan.

Applying for a loan is a huge commitment, which grows with the amount that you take out. It’s always in your best judgment not to bite off more than you can chew, and companies should respect that.

Loans should help you out, not pull you into a deeper crisis. When they try to talk you into taking out a larger amount than you intended, it should ring alarm bells in your head. When this happens, respectfully decline and consider taking your business elsewhere.

No matter the amount, it’s always a good practice to be careful with your money.  With GoDay, you can rest easy knowing that your experience will remain hassle-free. They are transparent with you every step of the way, and willing to help you make the right decisions.

 

The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any finance decisions. Appropriate independent advice should be obtained before making any such decision.

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