The presence of online loans is an important phenomenon in the financial industry since 2016. Powered by the company Financial Technology (Fintehc), online loans offer credit to those who have been difficult to obtain credit from banks or conventional financial institutions.
We have discussed in full the various online loans in this article . We see Fintech providing alternative sources of financing for the community.
A number of advantages of online loans compared to banks are:
- Does not require BI checking and credit card ownership in applying for a loan. Of course the absence of this provision makes it easier because so far many have been rejected by banks because they do not have credit history
- The disbursement process is much faster than a bank. Only 3 days online loans have been disbursed compared to 1-2 weeks in the bank
- Filing online through an application on a smartphone, so the process is easier than having to visit a bank branch office. Time and place restrictions are irrelevant to the online process
How to choose the best online loan?
Best Online Loans
We noted 5 tips that need to be considered by those who apply for loans online.
# 1 Cost Transparency
Because it is online, without face-to-face meetings, the clarity of processes, requirements and costs has been crucial from the start. Transparency is key.
How much interest should be paid, loan term and related fees are information that must be available on the loan website. Ideally, prospective customers can already see all the information easily and transparently on the website’s home page.
We found there is an online loan website that is very transparent. On the website homepage, they have explained clearly and in detail the terms, interest, when they are due and fees.
However, not a few online loan websites that are less clear include these things. The interest rates are unclear and the fees charged to borrowers are not transparent. Customers need to work harder to search the website to find this important information.
# 2 Ease of Requirements
Why borrow online if the conditions are difficult. Maybe that’s the reason people glance at this type of loan.
Convenience is the appeal of online loans compared to conventional loans.
One of them is the completeness of documents. Because many people find it difficult to apply for credit to the bank due to not being able to meet the document requirements.
We once found one online loan that only asked for an ID card and photo as a document requirement. This is clearly a condition that almost anyone can fulfill.
However, we have also met an online loan that requires quite a lot of documents, such as KK, electricity bills and others. Not an easy requirement to fulfill.
That is, despite loans like likely loans promising convenience compared to banks, our check found that not all online loans have easy conditions.
# 3 Disbursement Speed
One of the advantages highlighted by online loans is the speed of disbursement. They claim faster than banks.
However, on the ground we see that this speed varies between online loans.
First, there are promising decisions within 1 week, but not a few are able to disburse loans for less than 1 day.
Second, this is rather tricky, the borrower must pay attention to the definition of the promise of speed.
For borrowers, when loan approval and funds enter the account. That’s the most crucial thing.
The problem is, in the field not all online loans apply the same definition. Some say fast approval, if all conditions are met and verification is done. There is also a time gap between agreement and disbursement.
# 4 Submission Flexibility
Banks have a number of limitations in unsecured loan products. Take for example, the minimum loan size is quite large (an average of over IDR 5 million), the minimum loan term is 6 months installments and if the repayment is accelerated, the penalty is fined.
Online loans offer flexibility that cannot be provided by banks. We note the following:
- Loans can be lower than IDR 5 million. In fact, one of them gives credit of Rp. 1 million.
- The loan period can be daily. No need to be paid in installments.
- Expedited repayments are not subject to fines.
When you are looking for a loan online, this flexibility can be a crucial consideration. Compare between providers and see which one offers the best flexibility.
In addition, there are Fintech who already provide applications on Android and IOS, some have not. This should also be a consideration because applying for a loan via an application is easier than via a website.
You can check on Google Playstore and Apple Playstore, which online loans are already present in each of these virtual stores.
As we recall, not many Fintech loans online have applications. There are only a few that commit to making applications.
# 5 Coverage Area
Because it is still new, fintech companies that offer loans online usually still operate limited in Jakarta and surrounding areas.
So, even though you are interested and want to apply for a loan online, you may not be able to if you live outside the Fintech coverage area.