Online loans have seen an unprecedented increase in popularity over the past five years with 8.2 million online loans taken out in 2016 alone. However, just as remarkable about the online loans market is the exceptionally bad reputation it has and unless you’ve been living in the cave over the past few years you’ll no doubt have heard of the massive increase in people seeking help after falling into a cycle of debt post online loans.
Undoubtedly online loans can serve as an essential stop-gap for those who suffer a financial hiccup, yet all too many people choose a online loans for purposes that they are unsuitable for. With this in mind, we’ve put together a quick checklist of considerations for those thinking about taking out a online loans.
Do you really need a online loans?
This may sound like rather an odd question, after all, you’re here, reading this blog all about online loans, however, given the convenience of online loans , and the fact that they can provide readily available funds within the hour, many skip giving full consideration to this question. It’s true that online loans are convenient, but you do pay for that convenience, and in comparison to credit cards and overdrafts the cost of borrowing is significantly higher.
For this reason, you really need to ensure that you’ve exhausted all of your other options before plumping for a online loans.
Can you afford the repayments?
Many people take out a online loans to pay essential bills or buy household items, such as groceries, when they’ve found that their wages are delayed, or they’ve had a financially demanding month. However, many more people turn to larger and larger online loans to cover the debts that they’ve accrued elsewhere. If you’ve found yourself in this cycle of debt, and have outgoings that are eclipsing your incomings, then it’s time to seek professional help. Talk to your local Citizens Advice Bureau, or the Debt charity, Step Change.
Getting your head around online loans interest rates
online loans companies are required by law to advertise their products with the associated APR (or Annual Percentage Rate); however, this type of interest rate is really unsuitable for short term lending, as it is based upon interest accrued over the course of a year, rather than for the duration of the loan.
Generally speaking, you should simply look at the amount borrowed versus the amount paid back to get a true understanding of how much you’ll be paying for the loan.
Not all online loans companies are equal
Far from online loans being a generic product from all providers, with the same interest rate, charges and ethos to lending, online loans companies can differ drastically, and whilst some of these companies appear to be forever in the media spotlight, others pride themselves on offering a transparent and fair product. For this reason, it is essential that you compare online loans companies in their entirety, which is just one of the many benefits of getting online loans from online loans choice, as the search process that they provide returns a full and in-depth list that compares online loans lenders side by side.
Choice is a online loans comparison website with a difference; created by previously bemused and frustrated Online borrowers they understand the essential purpose that online loans serve. Equally however they also know that a significant number of online loans companies are pretty unscrupulous, which is why they offer straight up information about online loans and provide a search facility for their database of responsible lenders.