A personalloan is very easily accessible financial product nowadays. You can get a personal loan from any bank or non-banking financial company. Besides that, you can get a personal loan online too. There are so many online lenders that provide you a personal loan. Basically, they don’t have any branches physically, they run their business online. These online lenders also provide a loan to you at some rate of interest for a given period of time. Let us understand what a personal loan is actually.
A personal loan is an unsecured loan given by a lender to the customer on the basis of his earning capabilities and credit history only. There is no need of any collateral in the personal loan. Collateral is basically a property that you pledge to the bank as a security. Lenders basically ask for collateral in case of other loans like a home loan or a business loan but not in case of a personal loan.
Who Can Provide a Personal Loan?
There are so many ways to get a personal loan.
- Non-banking financial companies
- P2P Loan (Person to Person Loan)
- Online Lenders
As we know that how banks and non-banking organizations provide you a personal loan. They check your income and the credit history. If both are good then you have to submit a few documents and you will get a personal loan very easily. But in case you are not eligible to get a personal loan then you may think about online lenders. There are some advantages and disadvantages to getting a personal loan from online lenders. Let us discuss them.
There are some advantages of a personal loan from online lenders.
- First one is that you will get a personal loan very quickly. There are so many online lenders like LendingClub, Upstart, and Earnest that provides you loan online. They do not have any physical branches but they do their business online.
- Another one is that there is no need to submit the hard copy of documents actually. You have to submit all the documents online. There is no need to go anywhere like banks to submit the documents.
Everything comes with pros and cons. There is a disadvantage of online personal loan lending. They can charge you a little amount of money for the processing. Besides that, the interest rates can be a little bit higher than other loans. Besides that, a personal loan online is not available in every state.