A Guide to Online Loans: What to Look for and How to Avoid Deceptive Lenders

These days, it seems like there are offers for loans everywhere we turn. With the majority of the country suffering some kind of financial strain, it’s no wonder we’re seeing so many targeted ads, billboards, and commercials for loans and credit cards. 

Many are still playing catch-up from the last two years, and the fact that inflation has surged to its highest in around 40 years certainly isn’t helping. So, what to do when you’re struggling to stay on top of your finances and need a boost? 

There are plenty of options out there for online installment loans. The biggest hurdle can often be just sorting through them. Here is our guide to what to look for in online loans and how to avoid deceptive lenders. 

Same-Day Loans Online

Before we talk about how to sort your options and avoid predatory online lenders, let’s answer the question on everyone’s mind first: what is an installment loan? Many of us are already more familiar with this type of loan than we might realize. 

An installment loan is a type of personal loan that allows borrowers to obtain a set amount of money and repay it over a fixed number of payments. Some of the most important components of a personal loan: 

• The ability to pre-determine how much money you’ll be borrowing. 
• The option to personalize your repayment period before signing a loan agreement; two weeks is usually not enough, so look for the option to repay your loan over several months if you know ahead of time that you’ll need a little leeway. 
• Transparency; online lenders should provide a clear breakdown of applicable fees and regulations for their current and future customers. 
• An easy online application process. 

Like everything else we do online, online loans are growing in popularity year over year. 

Online Installment Loans vs. Physical Loan Locations 

Locking in an online loan is a similar process to getting one at any physical loan location, with a few very notable differences. One of these differences is that online loans are far more convenient. Everyone from busy parents with full houses to office executives with calendars loaded with meetings can get an online loan in a fraction of the time it would take to apply in person. 

Consider your regular banking practices over the last several years. With drive-up ATMs, direct deposit, apps like PayPal and Venmo, and the growth of mobile banking services, most of us haven’t had to step foot inside of a bank branch in years. Most banks even let you scan pictures of checks and deposit them into your account through their app. 

According to Forbes, the majority of Americans (78%) prefer to bank digitally (via a mobile banking app or bank website.) Why should obtaining a personal loan be any different? Online emergency loans eliminate the hassle of getting dressed up, finding childcare, moving meetings, or changing your work hours to get to a loan office before they close for the day. 

With an online loan, you can apply where you want, when you want, and in the coziest clothes you own. You can apply while your kids sit on the couch with you and watch TV, while you’re on your lunch break at work, when you get home at night, or before you leave in the morning. It takes most applicants less than fifteen minutes to apply for a Spotloan online. 

In addition to being more convenient, online loans can have faster processing times, better approval odds, and smaller service fees due to fewer overhead costs. And because they’re unsecured, there’s no collateral necessary. This means that your credit score will take a hit if you hit a hiccup repaying your loan, but you won’t lose your car or your home. 

The best part? Getting an online loan can be just as safe and secure as locking in a loan from a physical location. 

How to Screen Potential Online Lenders 

An offer of a same-day online personal loan can sound too good to be true. Many people wonder: is getting a loan online safe? Thankfully, the answer is yes - as long as you’re careful. When you’re considering taking out an online installment loan, we recommend screening the lender before you apply. 

Like lenders in physical locations, there are certain accreditations and regulations online lenders have to adhere to. The Truth in Lending Act (TILA), a federal law enacted in 1968, helps protect consumers in their dealings with lenders and creditors. Under this law, the following information should be made available to you before you sign your loan documents: 

• The annual percentage rate (APR).
• The term of the loan.
• The total costs to the borrower.

If this information is not made available to you during the loan process, that is a red flag. Beyond these details, one of the most important questions to ask same-day lenders before accepting a loan and signing your documents is what other fees you might be charged. Any reputable loan company will make this information easily accessible. There are no hidden fees associated with a Spotloan. Your fees are outlined when you apply and in your loan documents.

Payday Loan Alternatives 

Online personal loans are taking over as the go-to option for people who need money fast. Before online loans became popular, payday loan companies were a popular choice. But whether in-person or online, most people are straying away from payday loans these days. 

Here’s what to look for and why you should avoid payday loans: 

• They offer short terms, only giving you an average of two weeks to a month to repay your loan before you start incurring hefty rollover fees. 
• They often come with interest rates and various fees that aren’t always outlined upfront. 
• They ask for upfront payments; fees should come out of your loan proceeds, not out of your pocket before you sign your loan documents. 

Reputable online lenders won’t do the things listed above. At Spotloan, for example, we offer repayment periods that last up to ten months. We provide all the information you need on your rates and fees upfront, run a soft credit inquiry to ensure that we offer you the best terms possible, and worry about the fees on the backend rather than collecting them upfront. 

What is the Best Online Loan?

When it comes to personal finance, there are rarely one-size-fits-all answers. Instead of asking what the best loan is out there, you might be better off asking: what is the best emergency loan for me? The answer will change depending on your needs, so it’s important to do your homework and have all your installment loan questions answered. 

Our online personal loans are easy to apply for, processed and paid out quickly, and based on transparent banking practices. We offer discounts for repeat customers, operate a Financial Education page to keep our customers informed, and have a team of highly trained customer service representatives ready to help you every step of the way. 

How to Apply for a Personal Loan Online 

Before you get ready to fill out your online loan application, take a moment to get organized. Gather your driver’s license, income information, bank account information for the deposit, and a breakdown of how much you need to borrow. The breakdown doesn’t have to be anything formal, just something you put together for yourself.  

When you’re ready, visit our website and click the Get Started button on the top right corner of the page. In the dropdown boxes, choose the amount you’d like to borrow, how much you’d like to repay every two weeks, and click the apply now button. 

In most cases, you’ll know within minutes if you’re approved and where to go next.