Online Loans

What is an online loan?

An online loan is a common term used by many lenders but what does it mean? You would be forgiven for thinking that an online loan is a new concept in managing your money but it not quite that radical.

An online loan is a simple product with basic features. The difference is that you will have to apply for and manage the product through the lender's website, hence you will need access to the Internet.

Online loans are only available as unsecured loans. When you apply the lender will provide a decision in minutes, however rather than just providing an accept/decline decision your application may be referred to an underwriter for further review in certain circumstances. Some lenders allow you to select a bank account to transfer the money to, however many lenders still issue a cheque. You will be expected to pay your monthly payments by direct debit set-up when you apply.

All correspondence regarding your online loan, including statements, are usually delivered by email. Also, any changes to your account can only be instructed via the lender's web site, for which you will be given a username and PIN. Lenders usually do not provide telephone helplines or customer support teams for basic management of these products. For example, some lenders allow 3 month payment holidays throughout the repayment term. If you require this you will need to logon and request the chosen dates for the payment holiday.

Online loans are completely safe as long as you do not share your security details (username and PIN) with anyone. You can ensure the security of the web site by checking the website address - it must start with "https:\\" to be a secure site.

What are the benefits of online loans?

Online loans are now provided by many lenders, from banks and building societies to newer lenders that have been launched in the last few years (e.g. Cahoot). Some more established banks have launched online loans under different brands, for example Alliance & Leicester has launched an online loan from a subsidiary called Moneyback Bank.

Many lenders who offer online loans do not have high street branches and so they have lower operating costs. Because the lender keeps their costs low they can offer a low rate of interest for an online loan and pass on significant savings to you the customer. Established banks who offer online loans at competitive rates are doing so to compete with the new entrants in the market and this is only good for you if you are looking to borrow money.

Online loans have a typical APR of 6.0% or sometimes lower. The typical APR is the interest rate that 66% of the successful applicants for the product get offered by the lender. This level of interest rate is significantly cheaper than many standard products.

One of the biggest benefits of an online loan is the speed of getting your money. If your application is successful you usually get your money delivered to you within 24-48 hours. The application process is quick and easy and many customers will get an instant decision.

Online loans are particularly targeted at customers who know what they are looking for from their finances and do not need regular telephone support. Whilst they are available to all customers they appeal especially to younger customers who are prepared to carry out transactions over the Internet.

Myloanchoices recognises that many customers want to take advantage of the low interest rates of online loans and offers impartial information and search services on online loans to help you decide what product is right for you.

See Myloanchoices best buy unsecured loans

How can you find the best online loan for you?

Online loans are available from many lenders and new products are being launched all the time. It is vital that you take the time to research all the products available to ensure that you get the best interest rate available. You will be able to borrow money cheaply but you need to know where to look to get your information.

The interest rate is very important but is not the only product feature to consider. Many online loans have features such as the facility to take repayment holidays and the potential to pay off part or all the credit early. Some products however have additional charges if you pay off the credit early. You need to review the product criteria to decide whether these features are more important to you than having the lowest interest rate.

Myloanchoices offers impartial information and search services on online loans to help you decide what product is right for you. You can use the repayment calculators to work out how much your monthly repayments will be for different interest rates so that you can be sure of the benefits of online loans. Once convinced you can review our best buy online loans and review the detailed products features of each recommended product. When you have completed your research you can apply online by clicking through to the lender's website to start the quick and easy application process.

See Myloanchoices best buy unsecured loans