Written by author Luis Diaz Morales

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It happens that we urgently need money to fund education-related expenses or buy a car or a house. A personal online loan is a versatile and very convenient tool for those who have nothing on savings or checking accounts but urgently need access to cash and cannot use the services of the major credit bureaus and other traditional financial servicesa companies.

The credit score does not play a big role and the amounts offered are very flexible. All this makes online personal loans more affordable than traditional methods of borrowing.

When obtaining a loan online, you have the option to consult with personal loan lenders and choose a loan that will not hurt your credit score. Then you can fill out a loan application online and get money.

Pros and Cons of Personal Online Loans

To save your financial situation, getting a loan may be necessary. However, sometimes a personal loan can hurt you financially instead of improving your situation. 

Therefore, to begin with, it is better to familiarize yourself with the advantages and disadvantages of personal loans.

Pros

• Online format. Yes, banks also offer online loans, but often banks require you to come to the office in person. The online application process is one of the main characteristics of the personal loan online.
• No-risk estimates. Most online lenders allow you to pre-define and preview the rates. That will not affect your credit score.
• Speed ​​and simplicity. It only takes a few minutes to fill out the application, and then you will get various offers of the down payment from several lenders.
• Variety in confirming your reliability: lenders online are not only interested in your credit rating. They may request information about your education, profession, or your bank`s transaction to assess financial behavior.
• Repayment of the loan directly: in some cases, the borrower who has to consolidate debt can direct the money right to the lenders. This will remove the burden of paying individual credit cards.

Cons

• High minimum annual rates. Rates from many online lenders start at 6.99% for loans over $ 15,000. However, they can increase depending on your credit history and other factors.
• Smallest loans are not available. Many lenders have a minimum loan amount of $ 1,000 to $ 2,000.
• The danger of addiction. Sometimes payday loans do not help you save money, but rather make you spend more from your bank account. The loan amount must be reasonable and you must be able to repay it.

How to get a personal loan online

It is very important to follow a few steps to get started:

• check your credit history and scores in all credit bureaus;
• determine your current credit rating;
• choose the type of loan you need (consolidated loan, home improvement loan, medical loan, etc.);
• compare available annual percentage rates and fees and read the  repayment terms;
• in accordance with the above requirements, select the 3 best lenders for online application.

The rate that will be assigned to you when obtaining a loan largely depends on the factors that confirm your creditworthiness. In the case of a personal online loan, the interest rates depend on the credit rating and the debt-to-income ratio. The higher your rating, the lower your bid. The interest rate also affects your total monthly payment as well as the length of the term; the longer term means lower monthly payments, but more interest payments.

1. Student Loans Forgiveness U S Department of Education
   https://www2.ed.gov/fund/grants-college.html?src=rn
2. Advance Fee Loan Scams State of Michigan
   https://www.michigan.gov/ag/consumer-protection/consumer-alerts/consumer-alerts/credit/advance-fee-loan-scams
3. Credit Loans amp Credit Score New Mexico State Treasurer s
   https://www.nmsto.gov/wp-content/uploads/2016/08/Summary_Credit_Loans_and_Credit_Score.pdf