Online Loans VS Local Loans: What to Choose

Everyone has faced a situation where you urgently need an amount of money that you don’t have and start nervously googling “cash loans near me”. Maybe you need money to save life and health, perhaps to pay off debts, or for a large purchase. Situations are different, but they all have one thing in common — the need for a specific amount right now.

And not always people can find a way out, although the answer lies on the surface — to take a loan on Fit My Money. This is the most convenient and fastest way because you don’t have to humiliate yourself in front of your acquaintances by borrowing funds. It’s extremely easy to make an application and receive your money instantly.

Strengths and Weaknesses of Online Loans

People are always short of time and money. And the situation when you urgently need a loan from the bank, but you can’t visit the branch in time, is familiar to many people. Now it is much easier — applying for a loan without disconnecting from the current affairs can be done without leaving home.

Let’s take a look at why online lending is in demand and its main advantages:

1. Promptness of financial assistance. The ability to get money instantly to your bank card saves you in a force majeure situation.
2. Simplicity. Online applying for a loan doesn’t require any complicated actions —     just fill in the form, wait for the system to decide, and the money is already on the card. Thanks to the user-friendly interface of the website, even an inexperienced user will feel comfortable.
3. Time-saving. You won’t need a lot of time to receive an online borrowing. Once you pass the system check, the money will be credited to the specified card.
4. Independence from the bank’s working hours. It is impossible to foresee when you will need funds — it happens at the wrong moment, even at night. But unlike bank branches working only during the daytime, online service operates 24-7.
5. Ability to compare offers. After evaluating the pros and cons of the recommendations in the list, the borrower makes an informed decision.
6. Minimum of required documents. Many lending organizations don’t demand acertificate to confirm employment or income level. Only passport and ID codes are necessary.
7. Accessibility. Some categories of people find it difficult to receive funds from a bank. The opportunity to apply for a loan online is available to students, retirees, and the unemployed.
8. Profitability. Online loans are usually granted for a small amount and a short term. If you stick to the borrowing conditions, the overpayment will not seem so significant.

When Are Online Loans Inappropriate?

Such loans are worth choosing for situations where you need:

1. Small money amount.
2. For a short period — 1-30 days.
3. Immediately — when the matter must be resolved within half an hour.
4. Without driving and meetings with the lender.
5. Outside business hours/day — for example, at night or on weekends.

Online services help you close financial issues quickly and without hassle.

Banks can’t offer this, but they do give bigger loans for longer terms. Their interest rate is also lower, but the requirements for borrowers are many times higher. That is why not everyone can take a loan from a bank, even if they provide all the necessary guarantees of their solvency.

A Little About Statistics Results

Statistics show that 12 million people obtain money loans every year. You can find a bunch of money-loan sites all over the city. And online loans are just as widespread. Most often, they are obtained by people between the ages of 25-49.

$30,000 is the average annual income of a person who gets a cash loan.

Many people who get money loans earn less than $20,000.

Only 4% of all cash loans go to people making more than $60,000 a year. So the people applying for these loans are not in the higher income range.

A large percentage of those who get money loans with incomes under $20,000. People who earn money loans sometimes have bad credit histories and cannot get other loans with lower interest rates.

The average person who takes out a money loan stays in debt for 5 months a year. There are about 23,000 money-lenders nationwide. That’s if you don’t count online lenders. The average amount given to borrowers with the help of lenders is between $500 and $1,000.

Advantages and Disadvantages of Local Loans

Getting money offline is less convenient than online, but it still has its benefits:

1. There is no need to enter card data and fear fraudulent actions with it.
2. It is possible to see with your own eyes which the financial transaction will be made with.
3. Opportunity to access even without Internet or necessary gadgets.
4. Possibility to receive comprehensive answers to your questions from a specialist     (not all online organizations give loans to live people).
5. But we should not forget about the drawbacks:
6. Time costs are many times higher in the offline format.
7. When applying for a loan in the office, specialists pay attention to the behavior of a potential borrower, which may influence the approval/non-approval of the loan.
8. Territorial limitations — not all cities and towns are able to find microfinance organizations.
9. Time limits — offices work mainly on weekdays and only until the evening (that is, there is no possibility of receiving money around the clock, as in the case of online companies).

   

So which is better: going to the bank or taking an online loan?

The answer depends on what kind of loan the borrower needs and under what conditions he is ready to arrange it. If it is a large sum, it is worth going to the bank. You will have to prepare yourself, adapt to all its conditions, go through the bureaucratic chain, but this is the only way to get a large sum for a long period.

Online lending is more profitable to employ for emergency needs. If the money is needed urgently, for a short time, without special preparation, then it is better to arrange everything online and get the loan instantly.