Pros and Cons of Online Lending Platforms
Thanks to the internet many services and products became more convenient. Simple things like going to the supermarket can now be done online. Online shops are booming as the internet brings availability to a whole new level. Since so many services are available on the net it shouldn’t come as a surprise that lending services are now available online. They’re still developing but the service they offer is pretty good. This may be the future of finance as they slowly become more and more popular.
Back in the day if you wanted to start a business you’d get a loan from the bank or a private agency. Today you can just go online. Of course, there are many ways you can fund your business and one alternative that didn’t exist before is an online loan. Like all things, online lending platforms have their good and bad sides that everyone needs to consider before applying for their services.
Advantages of Online Lending Platforms
Time is an important resource of any business and online lenders save a lot of time. When applying for a loan the traditional way you have to do a lot of prep work. Getting your documents in order, checking for mistakes into your credit report and looking presentable are only some of the details you need to straighten out. You’d have to get up early because both banks and lending agencies have strict working hours and you won’t be the only one applying for a loan there.
What makes Upstart, SoFi and Asteria Lending so popular among clients? You don’t need to do anything of the above. Their websites are available 24/7 so even if you’re in a desperate situation you can apply for a loan. These lending platforms utilize computer algorithms that check out an application within minutes. Moreover, lending sites have a high approval rate regardless of your credit score is good or bad.
Waiting for the money is something you’d have to do if you apply for a loan online and offline. When it comes to banks and agencies you’d have to wait for a few days before the loan is transferred to your account. If you apply for a loan online and your application is approved then you can expect the money in 24 hours. Finally, there isn’t only one online lending platform so you can look for favorable terms elsewhere, compare them and pick out the one website that suits your needs the most.
Disadvantages of Online Lending Platforms
So far there are plenty of pros of online lending platforms and the only con of them are the interest rates. The thing about them is that they mostly offer unsecured loans so they have to apply high-interest rates to stay in business. On the brighter side, they are fixed so they won’t go up or down if your situation improves or betters. The other thing that might be considered a disadvantage is the fact that these platforms are online so it’s easy for scammers to set up a fake lending website. Other than that, online lenders are useful for small business owners.