The term online loan is nothing more than an installment loan that can be taken out online. It is offered directly by direct banks and other credit institutions, as well as credit intermediaries online, which is why the conditions are often more favorable, since this saves costs that banks incur with an expanded branch network.
Advantages of online loans
However, customers are offered many advantages that are not available for the loans that are taken out in the branch. The application process is much easier since everything can be done conveniently on the computer at home. The data is also transmitted at the push of a button and a non-binding commitment from the banks can be expected within a short period of time. Online loans therefore represent a simplified application process.
The way to the online loan is very fast and, what is particularly important nowadays, very easy for people. The loan application is made on the PC so that people do not have to go outside and are not tied to the opening times of the banks so that a loan can be applied for. The application is available at any time of the day or night.
Application has been received by the banks and the preliminary check has been successfully completed
The bank will send a loan application to the new customers. This must then be signed and the documents requested by the bank attached to the application. These are proof of salary and in many cases also bank statements from the current account. New customers at a bank also have to identify themselves. Since the banks rarely have a branch on site where the identity of the borrower can be ascertained, a special way has been created for online loans: the post-ident procedure.
The new customers can also identify themselves in post offices with a special form that supplies the loan documents. The form and ID card are required here, which the postal worker can use to inform the bank that the applicant for the loan actually exists. Swiss Post then sends the documents directly to the lending bank.
Online credit costs
But the crucial point that leads credit seekers to online loans again and again is the lower interest rates compared to branch loans. In a direct comparison with a single bank, the online loan is offered more cheaply than the on-site installment loan. The favorable interest rates are evidenced by the lower workload for bank employees. A personal advisor for each individual customer is not necessary; the customer service center is available for questions and problems.
The personnel costs saved are then passed on to customers based on the low interest rates. As with other loans, the interest rate for online loans is always tied to many factors. The amount of the loan, the term, and possibly also the creditworthiness of the customers can determine the amount of the interest, in addition to the requirements of the banks.
Comparison of online loans
However, loan seekers should not forego the comparison of providers if higher costs are to be avoided. All providers are compared in terms of interest rates. A comparison of the online loans also shows the providers who grant the loan without any additional costs or with only minor ancillary credit costs. The comparison will show the cost of a loan, which already includes all ancillary costs, such as a closing fee or processing fees and also the interest. In this way, the cheapest provider for an online loan can be found.