Personal loans can lead to limitless possibilities, from starting your own business to getting out of debt. Life can throw you a curveball between paychecks, demanding an expensive medical bill or repairs on your home, which is the beauty of online lending. Online lending often promises quick payment with little to no wait time on expedited approvals. But, be cautious before signing onto these fast-cash loans.
The biggest challenge comes with finding the right loan is that many of these online lending companies will not offer low interest loans. Instead, you will be faced with high-interest rates and fees which will weigh you down financially for months or years.
Additionally, these high-interest loans are expected to be paid back in a very short timeframe, putting pressure on the borrower to scrape up the money.
Lastly, these loans sometimes don’t factor into building your credit on time, because lenders will avoid reporting behavior to credit bureaus.
Several companies have worked towards addressing these issues with online lending. The following are companies attempting to fix the disparities within online lending today.
The biggest concern with online lending is the absurdly high-interest rates and fees you are faced with afterward. That is why companies such as MoneyLion help their customers find the lowest interest rates possible.
MoneyLion is a low-APR lender, meaning your annual percentage rate will be lower per month than other lenders. You can also get a quick cash advance of up to $250 with 0% APR through MoneyLion, giving you even more leeway with paying back your interest rates at your own pace. Fiona is another great loan company with low APR, starting as low as 3.84% APR. This allows you to avoid compounding interest rates on your loans.
Short Borrowing Time
Not only does compounding interest rates make it difficult for borrowers to pay back their loans on time, but several online lending services will also expect you to pay back the amount and interest within a very short time frame after borrowing. Many online lenders expect repayment from their customers anywhere from 30 to 90 days after taking out their loan.
If you’re looking to take your time with getting back the cash, look into LendingTree (NASDAQ: TREE). This company has loan terms spanning anywhere from three to 180 months, giving you just enough time to pay back that loan.
Trouble With Credit
Even if you are able to pay back a loan with high interest in a short borrowing timespan back in a timely manner, many online lenders will not improve your credit score. Those who are looking to boost their FICO (NYSE: FICO) credit score should be wary of companies that do not report to credit bureaus because your responsible financial behavior will not be rewarded.
With MoneyLion, users with low credit-scores can access a low-interest 5.99% APR loan to keep their savings progress on track. These loans are accessible at any time if you’re a Plus member, without the need to reapply. Not only will this loan be deposited in seconds, but it has been proven by MoneyLion to raise members’ credit.
MoneyLion has entered into a compensation arrangement with Benzinga under which MoneyLion pays a fee for marketing and advertising services. MoneyLion does not have editorial control over the content of this material. MoneyLion does not adopt, endorse, or guarantee the accuracy of content posted by Benzinga, and such content does not represent the views of MoneyLion
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