Applying for online loans is easier than ever, and many people prefer the convenience of this method. You can apply for an online loan at any time of the day instead of being restricted to traditional business hours. In most cases, you’ll get your answer instantly. Best of all, those who aren’t sure they’ll qualify will receive their answer in private without worrying about the embarrassment of being turned down in person by a loan officer.
Clearly, this is the way to go. We’ve put together a list of some of the things that you’ll need when you apply for your loan online.
A Steady Job History
To get the money you need, you must have the means to pay it back. This means that you need a job that has a salary that allows you to make your monthly payments. Beyond having a job, the lender will also want to see that you have a steady work history. It shows that you are likely to have a job throughout the duration of the loan term. They don’t like it when people have long periods of unemployment or bounce around from job to job.
You probably won’t qualify for a loan if you’ve just gotten a job after not working for a while. However, a lender might make an exception if you’re starting a new job in the same industry you’ve been working in.
Your Financial Documents
Any company providing you with a loan will want proof that you can pay that loan back. They won’t loan you money based solely on an income that you self-report in the application. You will have to show pay stubs and possibly tax returns.
What does this mean for an online loan application? You’ll need access to a scanner or quality digital camera to create images of your documents. Check out which formats the company allows before you apply. Have these digital versions ready as you apply. You won’t be able to finish your application without them.
Those who have no way to get digital versions of their documents can usually send paper copies through the mail, but this obviously slows down the process.
Your Credit Score
In general, lenders want to see good credit scores before they loan you money. This might be especially true in the case of an online lender because you don’t already have a relationship with them.
However, there are online lenders who specialize in working with people who have bad credit. If you don’t think you’ll qualify for a loan from a traditional lender, you should seek out this type of company for your loan.
A Bank Account
An online loan company will want to deposit your money directly into your bank account. In most cases, you will not have the option of receiving a check, money order, or cash. Some lenders even want to know your bank account information because you have to agree to let them withdraw payments each month.
If you don’t have a bank account, open one. Credit unions are often willing to work with people who have bad credit and were turned down by traditional banks.
When you’re ready to apply for your loan, you will need your account number and the bank’s routing number. This is information that you can usually find on your checks, but you can also find it after logging into your online account. You can also call the bank’s customer service line to get the information you need.
An Eye for Detail
When you apply for a loan in a traditional setting, you’re usually working with a single representative, either in-person or over the phone. Many people enjoy this interaction because it allows them to ask any questions they may have before making a final decision.
Those who apply for online loans don’t have this luxury. This means that you have to be able to carefully look over the terms of the loan on your own. Read the fine print. In particular, check out:
- The interest rate. Lower is better.
- Penalties for late payment. These might include late fees or increased interest rates.
- Term of the loan. This is how long the loan lasts. If you’re focused only on the monthly payment, you might not realize that it will take years to pay off.
- Early payment penalties. Some lenders charge a fee when you want to pay the loan off early.
There are other potential loopholes you may want to look out for, but these are the biggest ones.
Applying for an online loan is quite similar to applying for any other type of loan. You need to have decent credit and a job to pay the money back. As long as you’re applying with a reputable company using a secure internet connection, you should have few problems.