Online personal loan agencies have been growing like a weed in the US in the past few years. There have been articles from Washington Post to CFPB, the brainchild of 2020 president nominee Elizabeth Warren, outlining the detailed steps for consumer protection. This was a step to ensure better care for borrowers seeking loans among other things. To get a loan online is like investing in a firm. You can end up paying a lot more than what you had initially gained. And, most of the times, predatory practices and irresponsible management create a bad play on hard-earned money of middle-income and low-income families.
To get a loan online has become a major task today owing to tens of dozens of new lending firms mushrooming all around. This has certainly made it more accessible than ever before, but at the same time, a lot more confusing. It is confusing to find a legitimate agency and it is confusing with multiple hidden clauses and fees attached to them.
In short, for an average American citizen, 80% of whom belong to middle-income and low-income, find it a constant struggle to make ends meet. Whenever even a small medical expense comes along, it becomes tragically frustrating to find some extra cash. This is where they are forced to get a loan online or from storefront offices of firms like payday loan companies.
It is not Easy to Get a Loan Online with Bad Credit Score
If you are surprised to hear than almost 45 million US citizens do not have a score or any credit histories then you are lucky. There are most of the population falls under the ‘Invisible Credit’ category, as found by research by CFPB in 2015. And, this is largely concentrated at the 18 and 19-year-olds. IN addition to that millions do not have a regular income or are simply ‘Unbankable’. For them, their source of income, the annual income and a guarantor who can vouch for them are some of the alternative ways to get some cash.
- A good credit score means that you are good at borrowing and repaying.
- Without borrowing and repaying you cannot build a credit history, because prepaid doesn’t count.
- Without a credit history, you cannot get a good credit score, and hence no credit to borrow.
This is how the cycle continues and many simply find it harrowing enough to just let go. The reason thousands of these firms have set up offices in every nook and corner of the country is that they offer flexible options, repayment methods of ease, little or no late fees, and more without any hassle. It comes at a higher interest for sure, but some have no choice and this is preferable to running out of cash during a medical emergency, for example.
Traditionally, Applying for a Loan Meant Banking
You have a few basic steps to follow here, first, decide to apply for an online or offline loan, complete the online application, which many prefer, go through an alternative mandatory credit check process, and then your eligibility decision comes in. If all is well, you can sign a contract and go ahead with it. The funding and repayment are all listed in the clauses of the contract.
However, traditional methods are gaining momentum too in the era of 5G and are offering faster disbursal. To get a loan online still can be a complex process. It is here that payday loan-like firms come to the rescue. Your application is approved in minutes, and money can be transferred to you under a few hours.