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The internet has revolutionised the route to personal credit, and online loans have made personal loans more convenient than ever before. Today, online loan applications can be processed within a matter of minutes, and funds made available on the same day.
Yet with hundreds of financial providers in this industry, offering thousands of credit products, it can be easy to make an expensive mistake. Let’s walk through this sometimes-confusing landscape of personal loans online.
What Is a Personal Loan?
A personal loan (also referred to as an unsecured loan) is a form of credit with a fixed repayment term. With the exception of loans that may provide a payment holiday at the beginning of the loan, borrowers make monthly payments, every month, until the loan is repaid. Personal loans are typically for amounts between £1,000 and £25,000 for a period of between 6 to 60 months.
The Advantages of Personal Loans Online
Applying for personal loans online offers unique advantages compared to approaching a high street lender at a physical branch, including:
- Convenience – Apply at any time, from wherever you are in the world. You don’t even need to be on your PC, you can apply via mobile.
- Choice – You look forward to a world of lenders – Rather than a single high street lender, online personal loans are offered by hundreds, if not thousands, of different lenders
- Simplicity – Applying for a personal loan online is simple. All you’ll need is:
- Your contact details, employer’s details, email address, income and outgoings
- A debit bank account
- An internet enabled smartphone or touchscreen device (such as an iPad)
- The speed of funds – Once approved, many online lenders send the loan funds rapidly. At CashLady, our lenders can often underwrite, approve and transfer funds on the same day
- High approval rates – High street lenders typically have more demanding lending criteria whereas online personal loans can help those with less than perfect credit (for more guidance on personal loans for bad credit scores – read our guide article on loans with poor credit history).
How Do Online Personal Loan Applications Work?
Should I Use a Broker for My Online Loan?
An authorised credit broker, such as CashLady can help speed up the application process by showing your application to a panel of lenders – not just one. This means you can save time by completing just one application form, and hopefully save money by getting the best deal at the same time.
Why apply for a personal loan?
Personal loans are often used for the following purposes:
- Buying a vehicle
- Making home improvements
- Consolidating numerous debts (if you’re struggling with debt, you may want to read our guide: What to do when you can’t repay debt? Get help with debt problems)
- Financing a holiday
- Paying for a loved one’s funeral
Personal loans aren’t generally ideal for the following purposes, as other forms of finance will be more suitable (such as a short-term loan, payday loan, credit card advance or overdraft):
- Paying an overdue bill
- Covering a medical bill
- Repairing a vehicle
- Covering an unexpected period of delayed income
- Repairing a property or an appliance
Personal Loans Online – What Are the Charges?
Personal loans that are applied for on the high street have the same fee structure as those that are applied for online. This namely comprises of APR (Annual Percentage Interest), which is applied at a fixed rate at the start of the loan unless you choose a personal loan with a variable rate.
For late charges and additional fees, be sure to read the small print of the loan agreement carefully. Credit brokers shouldn’t charge you for their services. Instead, their costs are recouped from the lender should you choose to move ahead with the lender they connect you with.
Applying for a Personal Loan Online through CashLady
We are committed to treating people justly, and consistently meeting the tough FCA guidelines. With a decade of history in this industry, we’ve often been recognised as a leader in the market – most recently becoming a finalist in the Consumer Credit Awards 2017, and being named as Best Credit Broker 2016 by Smart People Money.