How Online Loans Have Changed the Way You Borrow
(Photo : How Online Loans Have Changed the Way You Borrow)

Have you noticed whenever things go wrong in life that they tend to come with a big bill? 

If you don't have an emergency fund at the ready, you might rush out to the bank to see if you can get a loan. People have been borrowing money this way for centuries because it was the only you could get a loan for a very long time.

Now thanks to the Internet, things are different. Instead of speaking with someone face-to-face, you can ask for financial help online from the comfort of your own home. 

How does this scenery change affect your borrowing experience? Here are three ways tech has changed the way people access money.

Online Resources Improve Your Financial Literacy

Rate shopping, or comparing your options, is an essential step before you take out any loan. 

Knowing what's available beyond the typical personal loans and line of credit loans empowers you to make informed decisions. That's according to installment loan lender MoneyKey, which provides a valuable resource on direct lender payday loans to improve readers' financial literacy. 

With a few clicks, you can add several tabs to browse and compare lender's rates and terms in real-time. There's no pressure to make a decision, so you can read all the information at your own pace.

Now compare this to going to a financial institution in-person or calling them on the phone. You'll have to speak with someone during their business hours, which may not be convenient for your schedule. You may also feel obligated to decide on the spot, which increases the chance you make the wrong decision. 

Online Loans Are a Convenient Alternative to Traditional Bank Loans

Online lending hasn't just made comparison shopping more convenient. It has revolutionized the entire borrowing experience, so you never have to squeeze in a visit to a brick and mortar location.

This comes as a huge plus in a time when social distancing is a major health concern. You won't have to mingle in a line up of people worrying about protecting your personal bubble. 

You also don't have to borrow on someone else's time. Many online lenders have an application that's available 24/7. If approved, you may automatically receive your funds in a bank account.

Technology Brings Money to the Underserved

As one of the biggest eligibility requirements for borrowing, your credit impacts how easily you're approved for a personal loan or line of credit. It acts as a gatekeeper to many traditional bank loans.

Those people with prime or super-prime credit tend to fly through approvals, as their scores reflect creditworthiness. That's why it's important you focus on how your financial habits affect your score and work on building credit. Eventually, your hard work will help unlock better loans.

But here's the thing - some subprime borrowers need a loan before they can work on their credit. 

Compared to in-person borrowing options, the online lending world caters to a broader spectrum of borrowers, including those with subprime credit. With some research, you may uncover an installment loan for people with bad credit.  

The Takeaway

Borrowing money online is more than just a chance to skip the bank. It offers you a chance to improve your financial literacy on your own time, and it caters to people usually left out of the traditional borrowing experience. 

So, the next time you face an unexpected emergency expense, stay inside; boot up your computer to learn more about your digital options.