Once upon a time, getting a cash loan meant physically going to a bank, payday lender or pawn shop. Fast forward to today, and there are thousands of online lenders vying for your business. Not only is it much easier and faster to get a loan online, the increasing options and competition in the marketplace mean you can afford to be picky when comparing the best online loans for your situation.
So what do you need to know about online lenders and the cash loans they offer? Answer these five important questions to help you identify the best online loan for you.
1. How much do you need to borrow?
There are two main types of online loans: installment loans and payday loans. Payday loans typically max out at $1,000, and even less in some states. Installment loans may allow you to borrow up to several thousand dollars, depending on which state you live in. Generally speaking, if you need more than a few hundred bucks, you’ll probably want to start by looking at an installment loan.
2. How much time do you need to repay the loan?
Payday loans and installment loans also differ when it comes to repayment terms. With a payday loan, you usually only have a few weeks (until your next payday) to pay back the loan. Installment loans allow you to pay the loan back in monthly or biweekly installments over a period of several months to several years.
3. How is your credit?
Can you get a loan with bad credit? It depends. Some payday lenders will give you a loan without a credit check—they just need to see proof of income so they know you can pay them back right away. Installment loan lenders may or may not check your credit, but often you may still get a loan with less than stellar credit. Be ready to provide paystubs and/or other financial statements to prove you can handle the payments.
4. What’s the best interest rate you can get?
Payday loans and other loans for borrowers with bad credit tend to have higher-than-average interest rates, but if you do have decent credit, it’s worth shopping around for the best deal. Also note that payday loans tend to have higher APRs (annual percentage rates) than online installment loans, so, if saving money is your priority, do the math on your loan options before you borrow.
5. Are you interested in building good credit?
Some online lenders simply loan you money and that’s it. But some, like RISE, actually wants to help you get your financial life on track. When you take out a RISE loan, you get access to your credit score, credit alerts and financial education resources—all for free. Borrowers who make on-time payments may also be eligible for discounted rates on subsequent loans.*
We want your online loan to do more than just cover an emergency expense or get you out of a jam—we want it to help you build good credit, practice smart money habits and establish a track record of responsibly dealing with debt. Apply for your cash loan-with-benefits at RISE today.