How to Borrow Money Online

How to Borrow Money Online

Whether you’re short on your bills, have a big unexpected expense to pay, or whether you’re just in need of a little extra cash, you may be in desperate need of some borrowed money until you can replenish your own funds. With things being increasingly online, and especially since the global pandemic hit, it’s not always convenient or even possible to make it into a bank, payday loan shop, or other financial institution to take out a loan. And that’s where the internet comes in.

When it comes to borrowing money, it can be overwhelming, embarrassing, and exhausting. Traditional lending methods can take a long time to be approved, meanwhile you’re stuck trying to juggle the bills and payments that caused you to seek out a loan in the first place. But it doesn’t have to be that stressful. By using the available tools online, borrowing money can be done quickly and easily from the comfort of your own home.

Here is how to borrow money online:

1. Payday loans

Payday loans is one of the most common ways on how to borrow money online. Due to increased usage of the internet, payday lenders are starting to forego the brick-and-mortar shops and are instead offering their services online.

How it works

There are tons of different payday loan companies out there, so the first step is to find one that you trust. You can also hunt around for the company that offers the best online pay day loans, and one that can loan you the amount of money you need.

You’ll need to fill out a short application form, and may need to provide documentation that proves your identity. Once you submit your application, it will be analyzed and once it has been approved, you will receive money directly into your account within 24 hours.

Pros of payday loans

Payday loans are often approved within 24 hours of being requested.

This is an unprecedented turnaround rate for most loans, and is a great option when you’re in a pinch. Payday loans also do not require a credit check, and can often be taken out without significant paperwork, documents, or lengthy applications.

Cons of payday loans

You will likely be looking at a higher interest rate, however payday loans are not meant to be long-term.

They are designed for short-term lending. In addition, costs are pretty clear up front, so you will be aware from the get go what it’s going to cost you. Any amount of the loan that is not paid back by the deadline is subject to a hefty fee.

2. Peer-to-Peer lending

Peer-to-Peer lending websites essentially match borrowers and lenders. The basic concept is that people with extra money offer to lend that money to those who need it.

How it works

Peer-to-peer lending is usually done through a service or website that facilitates the process. On this website, the borrower would have to fill out an application and undergo a credit check. When the application has been approved, the borrower then has a profile on the website which lenders can analyze to see if they would like to lend to that person. Borrowers may receive money from multiple lenders, however money is paid back directly to the marketplace, not to each individual lender.

Pros of peer-to-peer lending

Loan rates are typically lower than what you might receive from a bank or other traditional lender.

Borrowing from peer-to-peer lenders moves much more quickly than borrowing from traditional institutions like banks or credit unions.

Cons of peer-to-peer lending

You will need a credit check. It doesn’t have to be perfect, but it does matter. Furthermore, completing credit checks too frequently can even negatively affect your credit score.

This type of lending may not be available to some borrowers due to the laws in place surrounding this practice.

3. Online banking

You can often borrow money from yourself with a little creative transferring. You can easily transfer money from your credit card, line of credit, or other revolving credit account into your chequing account.

How it works

In your online banking profile, use the “transfer” option and select your credit card or line of credit as the “from” account, and your chequing account as the “to” account. If you do not have enough space to give yourself the necessary funds, try calling your bank and asking for a credit increase. These can usually be given easily without having to sign papers or physically go into the bank.

Pros of online banking

It’s already credit you have available to you, so you won’t have to undergo any credit checks or waiting periods.

You can easily transfer the money back when you get it, and won’t have to deal with any external parties.

Cons of online banking

Interest on cash advances from credit accounts is often higher and usually starts on the day that the money is borrowed, not at the next billing period.

This option not available for those who do not or cannot have access to credit accounts.

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