- September 12, 2020
Online lending has come a long way, overcoming all hurdles of traditional lending. In times gone by, borrowing money was not as easy as it is today. Even in urgent need of money, people had to wait for a couple of days to get approval. Thanks to FinTech, borrowing has become more comfortable and faster. Since the lending industry is using advanced technology to carry out the processing approval, you can get money without further ado, especially in case of emergency. Over the years, the number of people relying on loans has increased.
Soaring living cost is partly to blame for the increasing demand for loans. Most of the people are living from paycheque to paycheque. Studies have revealed that six out of ten people are broke in Ireland due to economic insecurities. Unfortunately, it has become a new regular thing in Ireland. People are facing difficulty in making ends meet, and hence they are turning to direct lenders.
Well, online lending has made borrowing money more accessible and faster. People with bad credit rating are also eligible to apply for loans. Until the inception of online lending, bad credit people could not borrow money from financial institutions.
It was mandatory to have a good credit score. Just because you can get a lender signed off on your application despite poor credit rating, it does not mean there is no sort of thing like rejection. Yet, direct lenders are more flexible than banks and traditional financial institutions. However, there are still some challenges. This blog discusses how direct lenders have appeared as a good opportunity as well as a challenge.
What challenges you are likely to experience when it comes to borrowing from direct lenders
Finding a reliable lender
The first and foremost challenge you will likely experience is finding a reliable direct lender. Several online lenders are out there claiming that their financial products are best. You often find advertisements stating attractive interest rates, no credit check, no prepayment penalty, and the like. It seems very tempting to approach them, but sometimes borrowers end up falling in a debt spiral.
You must choose a direct lender that is reliable and has a good reputation on the market. The best way to find a reliable direct lender is reading reviews, diving into social media networking sites to know if people have said bad things about the lender, and asking friends r colleagues for suggestions. Having done research beforehand will help you avoid a headache while applying for unsecured personal loans in Ireland
Comparing interest rates
Another challenge is finding a deal with lower interest rates. Each lender charges different interest rates. If they charge the same interest rate, the cost of loans will likely vary because of the difference in processing charges.
Even if you have a bad credit score, you will likely get a loan at a lower interest rate provided you research well. Stay up to date about changes in interest rates and try to choose a lender that does not charge any processing or hidden fees.
How borrowing from direct lenders is way better than traditional financial institutions
You can get a piece of financial advice online
A few direct lenders have financial advisors who are responsible for helping you when you are not able to decide which loans you should choose. There are various loans online in Ireland. It can sometimes be hard for you to determine what loan you should apply for. However, the most common reasons why people contact financial advisor is when they want to gain financial independence. While the cost of living is soaring, it is extremely tough to make ends meet.
Since you do not have much knowledge about how you can make your money work harder for you, you will need a financial consultant. They can help you in many ways from calculating affordability while taking out a loan, figuring out the best investments based on your goals, and telling many other ways to make most of your money.
Online lending is being widespread because of quick funding. You have to fill in the loan application form by visiting the lender’s website and submit your income statement.
Since online lenders use AI tools, they can quickly fetch your information from credit reference agencies to decide whether to sign off on or not. After the processing of the application, you get fu8nds just in a couple of minutes. However, this all had never been possible with traditional lenders.
If you have borrowed money from direct lenders and have a good repayment record, you can ask for the extension in case of having difficulty in keeping up with repayments. Repayment extension means you will get a leeway of a couple of days more if you are unable to pay off your loan on the due date due to unexpected reasons.
Though there are a few challenges when it comes to borrowing from direct lenders, it has several benefits too compared to traditional lending methods. Online lending has been evolving, making the experience of borrowers better and better.