The online loan is basically the generic term for pretty much any form of classic installment loan on the internet. These include the loans that can usually be ordered online, such as the mini loan, emergency loan, lightning loan, instant loan, etc. All of these types of credit are therefore inevitably linked to the triumphant advance of the Internet in the last 15-20 years. In the meantime, the online loan has established itself as a firmly recognized loan offer in the German credit landscape. This is mainly due to his often much cheaper credit conditions. The significantly simplified and thus faster application process for online credit compared to a film loan is also a clear advantage. Features that customers with an urgent need for credit undoubtedly value.
Main features of an online loan
If you compare the terms of an online loan with the loan conditions of a normal loan, which comes from a traditional bank branch, the interest rate is often the most noticeable difference. The reason for this difference in the interest rate of these loans is that the online loan is mostly issued by direct banks or online banks. Their structures and internal processes are generally far removed from their classic bank branches. This applies in particular to the processing and issuing of loans. These savings in structural and personnel costs often give online banks credit to potential borrowers. Without these banks themselves lose margin on a loan.
However, this also has its price and that means: Personal, individual advice does not really take place with this type of installment loan! The reason? Quality advice on a loan costs money and would directly offset the cost advantage of having an online loan. Almost all online banks active in Germany or direct banks offer online advice or at least telephone credit counseling. However, this telephone consultation is often associated with paid service numbers. What in plain language means: You pay as a loan seeker for a qualified credit counseling! Regardless of whether you take in an online loan at that bank or not! Thus, it is important to obtain comprehensive information on relevant credit portals and forums prior to taking an online loan. Especially when it comes to the topic of credit counseling. But in general: If you have questions about the conditions, you must research online on the bank’s website.
Online Credit: The Benefits
As mentioned earlier, one of the most significant benefits of using the online loan rate is its interest. Compared to the classic loan or filiak credit, online loan offers are often much cheaper. Current loan comparisons often show interest rate differences of up to 4 percent between the individual credit providers. The second advantage is the availability of online credit. As the Internet is known to have no opening hours, such a loan can be ordered online 24 hours a day, 7 days a week, 365 days a year – around the clock. The only requirement is an online connection. The application for an online loan is now quite simple and above all fast.
Assuming that all necessary information has been provided to the bank, the applicant can expect to receive an initial response from the provider within a few minutes. Ideally, the provider gives the green light for the personal loan in the form of an online pre-commitment. In this respect, the online loan is equal in terms of its availability a quick loan or lightning loan. Particularly suitable is this online orderable loan so if you need to quickly create financial liquidity by receiving a larger amount of money.
Online Credit: The Disadvantages
A drawback with this loan is that the advance confirmation transmitted online is initially not binding for a loan application. After all, the lending bank carries out a detailed check. Here it is compared to what extent the information provided matches the actual economic conditions. For this you have to submit as an applicant still documents such as earnings or bank statements with the respective credit provider. In addition, when issuing online loans, banks are required to carry out a so-called identification of the person. For this either the classical postident procedure or the modern video identification procedure is used.
This technology is slowly becoming established and some banks still insist on the classic and time-consuming post-ID procedure. Especially with the direct banks, which praise themselves with all other bank processes with appropriate time efficiency with the loan processing, then nevertheless a hitherto existing shortcoming. However, as already mentioned, a slow change in the necessary identification procedure is recognizable.
Care with credit-dependent interest rate
In addition, the following fact can be a disadvantage in an online loan: Some offer for an online loan read at first glance as a real interest bargain and thus often lead to a hasty action of a loan seeker – that is: a Onlinekredîtabschluss! But this can turn out later as a serious mistake, namely, exactly when the loan documents arrive and then there appears an interest rate, because you did not even have in mind and superficially did not appear in the choice for the online loan! The reason for this possible unpleasant surprise is often in online loan in a small word behind the interest rate mentioned and that means “credit-dependent”.
It is still common practice that many online credit providers call the lowest possible interest rate. Prerequisite for this, however, is a flawless credit rating. But exactly this perfect credit rating is a system-based 100% credit rating. A value, because in practice 99.9% of people probably do not have (can)! In this respect, the Bank reserves the right in its terms and conditions for the naming of a credit-based interest rate for an online loan, just to use a corresponding interest rate dynamics, which can lead to a sometimes substantial increase in the cost of online credit.
Prefer fixed interest rate over the credit-based interest rate for online credit
Tip: When choosing a provider for an online loan, always pay attention to the conditions under which the interest rate shown in the loan offer by the lending bank has its validity. If the word “credit-dependent” is used in conjunction with the APR, it is better to look for a fixed-rate loan provider. Thus, the possible borrowing costs regarding the expected interest burden are transparent from the outset and thus comprehensible in commercial terms.
Special feature of the online loan
That the Internet is fast-moving and constantly changing is nothing new. And in today’s generally fast-paced world, it’s anything but extraordinary. But just this constant change in the Internet has its pitfalls. Especially when it comes to looking for so-called short-term offers. After all, a corresponding bargain can save a lot of money. Those who are not continuously fast enough in their field of interest “up to date” and in terms of their decision-making skills are bound to miss such a top deal.
Exactly this also applies to the offer of online loans. No type of loan is subject to as steady a change in its terms as the online loan. Many banks offer their online loans on special terms almost on a monthly basis. Synonymous with the fact that apply for these loans, temporary, special interest rate offers. In this respect, these loans are also used by various financial institutions as a marketing tool. Because in this way – almost in the form of a “special offer” – it is possible to open up new customers. Or just to bind existing customers with the offer “for a currently particularly favorable online loan”.