With the Internet taking over the world, people have been able to make better financial choices. They have started to realize that a regular 9 – 5 job isn’t what they really want to do and that there are many other options. For example, starting their own business in a field that drives them and brings them joy, excitement and the feeling of financial freedom. Not to mention the fact that starting a business can let you go into retirement early and be your own boss!
However, the vast majority of people have not been able to gather enough capital during their career to start even a small business. This leads them to look for alternative ways to put together the funds needed and one of the first things that pop up in mind is applying for a personal loan. To get a personal loan you should definitely go to your bank and apply for one, right? Wrong!
Most banks require you to have spotless credit history, business duration of at least 2 years, a minimum annual revenue of at least $50,000 and of course, proof of ability to pay. Not to mention the fact that banks take about 3 months to review every loan application and reject more than 90 percent of them. So, this option is off the table if you are just starting a business. What is a better option, you might ask?
Online banking has been an establishment for several years now. Fortunately, there are now plenty of good online lenders to choose from. Online lenders are businesses or just ordinary people that are a part of a lending network who grant loans with much lower standards and quicker process. You’re not just filling out the same old forms for your bank – online lenders are changing the way you borrow.
Benefits of Online Loans
Quick approval: online lenders can tell you more or less instantly whether or not you’re approved, how much you can borrow, and what your payments will look like.
Better rates: it always pays to shop around, and online lenders often charge less than you’ll pay elsewhere. You should see lower interest rates and smaller service fees (if any).
Easier approval: banks and credit unions have grown skittish over the years. It’s easy to get a loan if you’ve got great credit. But if you’re still building credit or you’ve been through some hard times lately, banks will most likely not grant you a loan. Online lenders are more likely to approve lower credit scores and use alternative information to evaluate your creditworthiness (such as utility payments and even data from your social networks).
Unsecured loans: most online loans are unsecured, meaning you don’t pledge collateral to help get approved. That can make them safer than borrowing against your assets. If you fail to repay an unsecured loan, your credit scores will drop (among other things), but your car won’t get repossessed and you won’t face foreclosure.
With the whole economy and industry adjusting to the modern times of the Internet, financial sector is following suit. Because of that it is now much easier to get a business loan. You no longer need to apply for a loan in your bank with its strict regulations and slow process. In our next ARTICLE, we will discuss some of the best online loan websites you can apply through to get your loan.