Online loan: How to choose the best in 2022
Technological advances have made life easier in several aspects, including financial. In addition to being able to consult your bank statement and carry out transactions such as transfers and payments through digital channels, it is now also increasingly easy to take out an online loan.
This form of hiring is attractive mainly for convenience — you don’t have to go to a bank branch to close the deal. On the other hand, you need to be careful and use secure websites and channels to avoid becoming a victim of cyber fraud.
If you have already assessed your financial situation and decided that you need a loan, be it to pay debts, travel or purchase a property, be sure to consider the options available online. In this article, we will show you the way to a proper and safe hiring.
First, the most important
- Online loan is nothing more than the well-known financial loan only obtained virtually, through your cell phone or computer, wherever you are. In other words, it is not exactly a different line of credit or a product in itself, but a way of contracting.
- This loan can be contracted on the websites of traditional banks, financial institutions and bank correspondents, which function as virtual malls offering credit from partner institutions.
- Depending on the amount and type of loan, you can do the entire process online and receive credit in your account.
The Best Online Loans: Our Recommendations
As the online loan can be contracted on digital channels by banks, financial institutions and bank correspondents, we have separated one option from each segment to serve as a reference when researching this loan.
There are, however, many other options that can – and should! – be consulted before closing the deal. Requesting proposals is free, and you only need to commit to the loan if you think the offer is interesting and decide to close the contract.
- Bank with attractive interest rate
- Financial on the online market since 2015
- Virtual shopping mall with more than 30 partner institutions
Hiring Guide: What You Need to Know About Online Loan
The key point of hiring an online loan is to take advantage of the facility that the electronic channel offers to run simulations in as many financial institutions as possible. Thus, you can compare the conditions offered and choose the best one for your needs.
To start your search, have documents like ID, CPF or driver’s license on hand; proof of income; and proof of address. Other documents may also be requested. Understand more about taking out the online loan below.
How to make a loan online?
The hiring process varies depending on where you apply for your loan, as institutions have different requirements in relation to information and documents, for example. However, some steps are basic and understanding them will make your job easier. See the step by step:
- Access the website of the financial institution or banking correspondent;
- Enter your information and digitally send documents, if necessary;
- Enter the characteristics of the credit you are looking for, such as amount and payment term;
- Simulate the loan;
- Analyze the conditions offered;
- Compare with offers from other institutions;
- Finalize the contract.
Bank or financial: Where to make the loan?
To take a loan on a bank’s digital channel, you will probably have to be an account holder at that financial institution. Generally, you will also need to have a pre-approved credit limit for the process to be 100% online.
In this case, just access your bank’s internet banking or mobile banking, see the available limit, the loan conditions and, if you agree with them, request the credit, the money will fall into your account at the same time.
Since your bank already has your credit history, it will not ask for any extra documents for pre-approved loans.
However, if you do not have a pre-approved limit, if the limit is lower than what you need or if you want a different type of loan than what is available, you will need to contact your account manager to apply for a loan. pre-approval, raising the limit or accessing a different line. In that case, it will depend on the bank’s credit analysis.
To take an online loan at finance companies or at virtual malls, you will need to register your details and request a simulation. As you do not have a track record as a customer at this institution, you will undergo a credit analysis based on the data and documents sent.
Some institutions offer up to 48 hours to release the money.
If your credit is approved and you like the conditions, you can close the contract and the money will fall into your account within the defined period. Some institutions offer up to 48 hours to release the money, but others have much longer terms, up to ten days, for example.
It is worth mentioning that all lending operations depend on the analysis of the consumer credit risk.
Financial institutions can use several criteria in this analysis, such as income, equity and the status of the individual in credit protection agencies (SPC and Serasa). It is this assessment that will determine whether the institution will grant the loan or not.
What are the advantages and disadvantages of online loan?
As already mentioned, the convenience of taking out a loan without leaving home is, without a doubt, one of the main advantages of the online modality.
Another even more important advantage is the possibility of comparing term and interest offered by various institutions, and not just by the bank you are used to. The speed of the process is also a benefit.
Among the disadvantages are, for example, the risk of fraud when some basic precautions are not taken and the greater chance of hiring on impulse, without assessing whether the loan is really necessary, because of the simplicity of the process.
Another disadvantage is the fact that there is no “tutor” suggesting and explaining the credit characteristics, as the role of the bank branch manager ends up being. Many financial companies and virtual shopping malls, however, have service channels to help with hiring.
Is there an online loan for negatives?
Individuals whose names are registered with credit restriction bodies, such as SPC and Serasa, are called negative. This means that the person has overdue debt at a store or financial institution. In other words, “his name is dirty in the square”.
Being negative is usually the most common cause of disapproval of an online loan application, as financial institutions may understand that you are a bad rep. Some simply do not provide credit to negatives under any circumstances.
Credit to negative accounts usually has higher interest rates.
However, there are institutions that lend money to negatives. The problem is that interest rates are much higher due to the risk of default.
The way to find these options is the same as for any other online loan: enter the websites, register your data, simulate the loans and compare.
To find out if your name is negative, you can access the websites of credit restriction companies and use your CPF to check your situation. To get out of the negative condition, the best way is to try to renegotiate the debt you have outstanding.
If you cannot renegotiate your debt and still need a loan, the best way is to research.
And, of course, if you have an asset to pledge or if you have a fixed job or are retired and can have the portion of your loan discounted directly from your paycheck, you will get a better rate (see interest information below).
Is it safe to borrow online?
The online loan can be fully secured, like any loan you take from a bank branch, if you look at some recommendations.
It is not safe to use links received by email.
Among the recommendations is to access only secure sites, from institutions or known banking correspondents — do not enter links received by email, for example. When you are on a secure website, there is usually no problem in placing your data, as these channels have technological solutions to safeguard information.
Also do not accept offers sent in your mailbox, whatsapp, messenger or SMS, as they can be fraudulent or contain viruses that capture your personal information. Financial institutions do not normally make direct contacts for specific credit offers.
Also, do not pay anything before the loan is released. The simulations are free, you do not have to pay anything for them, and the loans will only start to be paid within the term defined in the contract.
In addition, double the care if the offer is too advantageous, outside the market standards. In this video you can find some tips on how to avoid fraud.
Hiring Criteria: What to consider when taking out an online loan
Now that you know how the online loan works and how to simulate yours, you need to know the aspects that must be analyzed before closing the contract.
We made a list with the main criteria:
- Interest rate
- Payment term
- Loan type
- Credibility of the offering institution
Check each criterion in detail below.
The cost of a loan, be it online or contracted directly at a bank branch, is one of the items that most concern those who need money. Interest can make your loan very expensive.
Interest varies from institution to institution. As explained above, each financial institution has its own criteria for determining the customer’s credit risk profile and the interest that will be charged.
But there are some ways to make your loan cheaper. One is to provide your assets, such as car and house, as collateral. In this case, in addition to presenting the documents normally required for the personal loan, you will still have to send documents relating to the assets in question.
In some cases, the financial institution will require a physical assessment of the asset before accepting the guarantee.
Be aware that, in addition to interest, you will also have to pay other fees, such as credit opening fee and Financial Operations Tax (IOF). The Total Effective Cost of the loan (CET) is what will be your final cost, considering interest and all fees involved. Also pay attention to this value.
Just like the interest rate, the term of the online loan is another essential criterion to be considered before closing the contract. This term means the time you will have to repay your loan – and it can vary from months to years.
The terms available online generally range from six months to five years, but it is also possible to hire for a longer period, depending on the financial institution.
Depending on the term you choose, the amount you will pay monthly for your loan may be higher or lower.
Before hiring, check if the installment fits the budget.
So, before closing the contract, check if the final installment, after interest and other fees charged, fits your budget. There is no point in taking out a loan to pay other debts, for example, and not being able to repay it later. You will only be more indebted.
If you think the installment will compromise a very large portion of your income, try to extend the term of the loan. Thus, you will pay for more time, but a lower monthly amount.
Remember that the term of the loan also influences the interest rate. Thus, if you change the number of installments in your simulation, it is possible that interest rates will also change. The ideal is to compare offers to have the best combination of these two factors: interest and term.
Just like the loan contracted at a physical agency, the online loan can involve different modalities.
The main type is the personal loan, in which you can use the money however you want. This is also the type that requires the submission of the least amount of documents. Generally, proof of income and personal documents are sufficient.
But it is also possible to contract payroll loans (where the installments are deducted directly from salary or retirement), car financing and even home.
These loans have lower interest rates than personal credit because the risk to the financial institution is less. The institution discounts directly from your paycheck, without the money going through your checking account (in the case of payroll loans), or with the guarantee of the financed asset (in the case of real estate or cars).
But to hire these modalities, more documents tend to be required. In the payroll, for example, you will need to prove employment or receipt of retirement. In asset financing, the process is usually more thorough and often involves both data analysis and asset expertise.
Not all financial institutions offer all types of loans. So, research is the best way out.
Credibility of the offering institution
Once the loan is simulated and chosen the most convenient for you, it is time to check the credibility of the financial institution offering the credit.
First, check if the institution is regularly registered with the Central Bank, responsible for regulating the financial market in the country.
Inquire about the financial institution’s assessment.
Also inquire about the customer’s assessment of the financial institution. You can use consumer protection agencies or Claim Here, for example, to do your research. Enter the name of the institution and you will be able to see the evaluations.
In addition, it is important that you carefully read all the conditions set out in the loan offer before closing the contract. Check if the amount and number of installments, for example, are in accordance with what you requested. Only after all this analysis, close the contract.
The online loan is nothing more than the traditional loan contracted virtually, that is, through your cell phone, tablet or computer. You do not need to go to a bank branch to close the deal.
One of the great advantages of this type of contracting is the possibility of researching and comparing the conditions offered by several financial institutions. Do as many simulations as possible to ensure a good offer.
Before hiring, some of the criteria that need to be evaluated are the interest rate and the term for repayment of the loan. Just take out loans that fit your budget.
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