They say bad luck comes in threes — and anyone who has faced financial emergencies knows this can be true.
Let us know if this sounds familiar: your car breaks down unexpectedly, you get sick, and you need to replace your phone after it takes a nasty tumble.
Managing financial bad luck like this isn’t always easy — especially when your savings are a little thin.
If you don’t have enough squirreled away for your next unexpected emergency expense, you might think you have to arrange a visit to your local financial institution to get a line of credit.
But not so fast.
An online personal line of credit may be a way to borrow cash when you need it without ever having to leave your home.
Let’s take a deep dive into online lending, so you know more about your digital options.
What is Online Lending?
In a nutshell, it’s any loan or line of credit you get over the Internet rather than from a brick-and-mortar financial institution. It’s just that simple.
Remove the brick-and-mortar location, and what do you have? Generally the same options you have when going to apply in-person.
Here are just some of the ways the online lending and in-person borrowing experiences overlap:
- Your financial institution may check your credit to determine your creditworthiness
- The score they see may impact the rates and fees you end up qualifying for
- You receive a personal line of credit limit that you may use at your discretion
- Your usage, as well as your rates and terms, determines your balance
- You may pay off your entire balance in full or choose to pay the minimum balance
- You may borrow against your limit on a repeating basis without having to reapply
So what makes an online personal line of credit different? It’s the technical side of the application process and repayment schedule that sees the biggest changes.
Let’s look at what makes them stand out below:
- You visit a financial institution’s website or app to start
- You fill out an online application to see if you qualify
- You’ll receive your funds online, and you’ll have the option to pay it back online as well
Why Make the Digital Jump?
In the same way Amazon Fresh makes shopping for groceries easier for people who don’t want to leave the house, online lending is a more convenient way to borrow.
You won’t have to make time out of your day to visit a brick-and-mortar location to speak with a representative.
Instead, you can apply, review your profile, and make payments whenever (and wherever) you have a secure connection to the Internet.
This is a huge advantage if you do shift work that’s at odds with your financial institution’s in-store hours, or if you live far away from a financial institution.
Is it the Right Option for You?
While an online personal line of credit may be a convenient way to borrow, it’s not the right fit for everyone.
It depends on how easily you can connect with the Internet, and your own personal money management habits.
If you prefer speaking with people face-to-face, you may not appreciate navigating the digital landscape of your line of credit. But if you like the idea of applying in your home, on your time, then opening a new table may be the right choice.