Advantages of online loans over bank loans Automatic translate

Online loans are very popular, and this is not surprising, because they have many advantages over bank loans. We will not advise where you can get an online loan , but we will tell you about all the advantages of loans issued on the Internet at interest.

Simplicity of design

Online loans are much easier to apply for than bank loans. The thing is that MFOs and IFCs do not require a large package of documents, collateral or guarantees from their clients. Usually, to get a small loan, your passport data is enough. You will also not need a certificate of income, since microfinance companies do not require borrowers to confirm their income.

The ease of registration also means that you don’t even need to leave your home. If in order to receive a bank loan you must first get to the bank and stand in a long line (and sometimes more than once), then with MFOs everything is much simpler - you simply register on the organization’s website and submit an application for a loan. If your application is approved, the funds will be credited to your account almost instantly.

High percentage of loan applications approved

Unlike a bank, MFOs do not have particularly stringent requirements for clients, so the likelihood of getting a loan here is much higher. For example, banks do not want to cooperate with unemployed persons, as well as with those under 21-23 years old, based on the fact that students or people without official employment may be insolvent. Unlike banks, MFOs issue loans from the age of 18, and the microfinance company will not be interested in your employment at all.

In some microfinance organizations, the approval rate of applications reaches 95-98%. This is especially true for those organizations that issue small loans for a short period.

You can get money at any time

If financial problems take you by surprise, then you may not have time to contact the bank. The fact is that obtaining a loan from a banking organization may take up to several days. But you can get a loan from an MFO in 10-15 minutes. In addition, you can apply for a loan at any time of the day, on any day of the week, including holidays or weekends. Banks provide the opportunity to obtain a loan only during their business hours.

The purpose of the funds does not matter

In an MFO, no one will ask you why exactly you needed the money, unlike a bank, where the manager will definitely ask you uncomfortable questions.

It is not necessary to have a positive CI

A positive credit history is a mandatory requirement of any bank. You will not be given a loan if you have had serious delays in repaying loans in the past. But even with a negative credit rating, you can contact an MFO, since many companies operate without even checking your credit history.

You can borrow even a small amount

Banks do not work with small loans, as it is simply not profitable for them. In contrast, MFOs are ready to give their clients from 500 rubles to 30-50 thousand rubles or even more, depending on the established credit limit.

No need for a whole package of documents

To apply to a bank for a loan, you will need to collect a whole package of documents, which will include a certificate from your place of work about your income. To obtain a loan from a microfinance company, a photo of your passport and Taxpayer Identification Number (TIN) or other document of your choice is usually enough to confirm your identity.

Are there any disadvantages to using microfinance organizations?

There is only one significant drawback - this is a fairly high interest rate - it can reach up to 1% per day. For example, if you borrow 30 thousand rubles for a period of 30 days, then you will need to return the same 30 thousand + 1% for each day of use of the borrowed funds, that is, 30,000 + 9,000 rubles = 39,000 rubles. You will have to overpay 9 thousand rubles, which is a lot. But not all microfinance organizations have such a high loan rate. For example, there are many companies that are ready to issue the first loan at 0%. MFOs also provide discounts for repeat clients. Therefore, you need to carefully choose a microfinance company in order to take a truly profitable loan.

Text: Tatiana Sergkir