The presence of online loans provides a breath of fresh air for the community because it offers many facilities to take credit. However, some online loan risks need to be scrutinized by prospective customers as the online loan case is rife. Online loans are a type of personal loan that also offers some risks. You have to think twice before getting a personal loan. It really can help you deal with financial issues because you can get some money instantly. Still, you have to consider these following risks of personal loans.
- High interest
It’s a fact that you have to know from the beginning that the online loan interest rate is relatively high. It could even be considered very high. Until now, the Financial Conduct Authority has not set the matter of online loan interest limits. High-interest rates are left to market players or online loan companies.
Online loan companies have their own reasons for applying such high-interest rates. One of them, the high risk of online customers, due to the ease of requirements and speed of approval. As long as the borrowing customer knows and counts the interest to be paid, there should be no problem taking a loan with super high-interest loans. Anyway, for what interest is low but loans are difficult to obtain or approval is given a few weeks.
The problem is those who take loans online without counting the interest and only complain when they have taken a loan which consequently is unwilling or unable to repay the loan. So, the high-interest rate is something that is important to be known by online loan customers. Although, many still take loans online because speed and ease are more important than the amount of interest.
- Small Amount of Money
One of the disadvantages of online loans or personal loans is the low collateral-free loan. On average, you may borrow under $3000. Some online payday loans even start from $100 and can only ask for a loan increase after taking several loans.
Have a look https://www.bugiscredit.sg/payday-loan/. The nature of online loans that are fast and easy has an impact on the offered loan. In this case, you cannot borrow a large amount of money. For loans in large amounts, customers still have to go to the bank anyway.
- Personal Data Stored Online
In applying for an online loan, as part of the online loan procedure, prospective borrowers are required to download an online loan application. The customer downloads the application on the mobile and then makes a request for a loan. Of course, this method provides convenience. Whenever you need it, just open an online loan application on your mobile and can apply for credit. However, the risk is exposing personal data on mobile phones that online loan companies require access to when customers apply for loans.
Is getting personal data wrong? In general, as long as the prospective customer gives consent to the company to view and analyze data of the client or cust, it is legal to use the data. Most importantly, the prospective customer understands that he or she is giving approval for the use and access of his personal data for the purposes of applying for credit online.
- Long Approval Process
High expectations when applying for an online loan is quick disbursement. However, the reality is that not all online loans can deliver quick money disbursement. You can read some comments in the PlayStore that complained about online loan services about the length of disbursement and the lack of response (approved or not) for applying for online loans.
In fact, despite using technology, many online loan processes cannot be fast. It takes several days for a decision to be approved or not. This condition needs to be realized by prospective customers. High expectations need to be accompanied by the awareness of reality on the ground.
- No Pay Loans Online, Collectors Come
Like all loans, if the customer does not pay, there will be a billing action. Billing will not be made if the customer pays on time. There is a perception because this is an online loan, if the customer does not pay then there will be no billing process and the only reminder is done via email and SMS.
Of course, this is not entirely true. On the website and information in the agreement, it is clear that non-paying customers will be billed by online loan companies.
What are the sanctions for not paying online loans? First, online loan companies will take billing. Billing measures ranging from a reminder to intensive so that customers pay their obligations. Secondly, report customers to the credit bureau required by the FSA to every Fintech company. This report aims to ensure that non-paying customers cannot apply for loans again.
So, if you really want to apply for credit at an online loan company, make sure you have the ability to repay the loan. Don’t be tempted by an easy and fast process, the customer does not take into account the ability to repay the loan, which ultimately results in an unpleasant billing process.
What is the solution to not being able to pay online loans? What if the customer fails to pay the loan? How to pay off online loan debt? These are a number of things that need to be considered by prospective borrowers when choosing a loan. Because some online loan lenders provide solutions for customers who cannot pay loans online. For example, extending or rescheduling loans, of course with certain costs.
- Billing Administration Fee
One thing that is often forgotten. When in arrears, the risk is not only facing billing, but also additional costs because online loan companies ask for late payment fees. Therefore, when choosing a loan, make sure that online payment access is good enough. There are many options for access to online loan payment methods.
In addition, because the billing process requires extra human resources, some online loan companies charge billing fees to delinquent customers. The amount of this billing fee is quite large compared to the loan ceiling. The problem is, the provision of fees that must be paid if customers are in arrears is not clearly stated on the websites of several online loan companies.
It is as if there are no additional obligations if late paying, despite you actually have to pay it. Therefore, prospective customers need to inquire or read the credit agreement carefully about the obligations if the customer is late in paying loan arrears.