Because in time you could only borrow money either directly at the bank office, then they also added that you could call them to borrow money. Nowadays, the banks have gone a step further and are also offering people to borrow money online.
Here we will explain a little quickly how it is possible to apply for slightly different types of loans online.
Borrowing money online – Micro loans / SMS loans
Applying for a micro loan online is a pretty simple business. The first thing you should do as with all other loans is to compare the prices at the various loan institutions. Once you’ve done that, go to the desired lender’s website and find the form they use to let people borrow money online.
In this form, you enter basic information about yourself and the loan you want to apply for. The bank uses this to determine whether you can borrow money online or not. What distinguishes micro loans from other loans when you apply for them online is that you often need an application code. You can get this application code by sending an SMS to the lender.
After submitting your form, you can expect to receive a reply quickly whether you can borrow money online or not. If you get it, you can also expect money to be paid out quickly to your desired account.
Borrowing Money Online – Private Loans
The first steps for a private loan application are the same as for a micro loan. What is different here is that the bank often only tentatively approves your application after you have submitted the form. They will send you a promissory note that they want you to sign. You then mail this letter to the bank, which will then make a final decision whether you can borrow money online or not.
If they approve your application, you can expect to have the money from your private loan deposited into your account within a couple of days after the approved application.
Borrowing money online – Mortgage
The first thing you do when applying for a mortgage online is to apply for a loan pledge. You then use this loan promise when looking for a house. It is important to remember that the house must normally be purchased through a broker.
If you then find your house, you supplement your loan promise with information about the intended house purchase and submit it. The bank will then make its own assessment if the house is worth enough to be able to stand as collateral for the loan.
You then submit a copy of the signed purchase agreement to the lender. They will then send paper on the loan back to you that you sign. The signature here is a confirmation that you really want to borrow money.
Borrowing Money Online – Summary
Unfortunately, it is not so easy that all credit institutions use the same types of loan processes. Therefore, the steps that we described a little quickly here may not exactly match exactly how your desired bank does. However, the above information gives you a good basis for understanding how it normally works.
The Internet is a convenient tool when you want to borrow money, whether you apply for the loan directly online or if you are just looking for information, compare prices and look up terms. However, applying for a loan directly on the Internet is usually very smooth.