Online lender is a kind of financial lending facility. They issue its funds, as a rule, on a short-term basis and on the following terms:
- only financial resources are supplied;
- there is a predetermination in the supply of resources in terms of size and timing;
- the resource is issued temporarily for a specified period;
- the terms for the return of the same resource are provided for and negotiated;
- the resource is issued on a paid basis.
Usually, the concept of a lender is narrowed down to a provider of financial resources on a long-term basis, while their entire totality can be subdivided into two large groups with conventional names: market and individual target.
By market lenders, we mean participants in the capital markets, mainly investors who invest their free money in the bonds of firms. They are not explicitly tied to a specific firm, more precisely, are indifferent to it and are guided solely by considerations of strategic profitability and potential liquidity of the acquired asset.
Individual target lenders, and these include primarily banks that provide long-term loans and leasing companies, are focused on a specific firm, and the bilateral agreement concluded at the same time takes into account the specifics of the activities of this particular recipient firm.
What are online loans and who issues them?
An online loan is a loan that is issued on the Internet, and for this you do not even need to leave your home. Online loans can be issued by microfinance companies. There are many lenders issuing loans online. We find the website where there are many reviews such as Moneymutual reviews. The reviews contain many useful and trustworthy information about terms and rates offered by a specific lending company.
At the same time, it is not necessary to visit the office. The lenders will carry out remote identification of the client. In this case, identification will be simplified, in which the maximum loan amount is $2,500, the term of provision is no more than 30 days. If you are planning to take a loan for a large amount or for a longer period, you will have to go to the company’s office.
To issue an online loan, it is enough to fill out an application on the official website, indicating your personal details. Often the decision to approve an application is made within several minutes.
Microcredit companies can also issue online loans. Their borrowers must visit the company office at least once for identification.
How to apply for an online loan?
First of all, you need to choose a payday lending company and make sure that it is listed in the state register of microfinance organizations.
You should carefully read the rules for the issuing of online loans and the terms of the agreement on the website of the lender. Then you need to fill out an application posted on the same website, indicating your ID data and bank card or account details.
After reviewing the application, the lender sends an SMS about the decision to the phone number indicated by the applicant. If the answer is positive, the SMS contains a confirmation code that the borrower enters into a special field on the company’s website. And after the code is entered, the lenders transfers the money to the specified details.
How to get the borrowed amount?
The first, traditional, method is to receive it on a bank card or account. In this case, the application must indicate the details of the bank account.
The second way is to get “electronic money”. Instead of an account, you indicate the details of your “electronic wallet“, to which funds are transferred in national currency. Then they will be converted into special payment units that are used by a specific payment system.
There is one way is to receive the borrowed amount in cash through one of the payment systems, which must also be indicated in the application. The money will be issued to the borrower at the office of the payment system after presentation of the ID. Thus, this is not an online loan in the full sense of the word.
What is the interest rate for online loans?
Every now and then advertising promises instant loans at 1-2%. However, it is silent that this is not an annual interest rate, but a daily one. Moreover: in the agreement, this information can be deliberately categorized under different points. It is assumed that online loans are taken out on a short term: payday. But if someone could not pay off on time, there is a delay, the obligation increases for months, for years.
If we are only talking about late payment, the interest should not exceed twice the amount of the outstanding loan part (forfeit is also included in the calculation).