Key learning points
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An online credit network allows you to simultaneously compare personal loan offers, including rates, terms and fees from a company’s partner lenders.
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When you submit your application, the network uses the personal and financial information you provide to connect you with lenders that best fit your unique financial situation.
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Using an online lending network can be a great option if you prefer to apply from the comfort of your own home.
When taking out a personal loan, there are different types of lenders to consider, including banks, credit unions and finance companies. Of these options, it is also wise to consider online lending networks.
These types of lenders allow you to view a number of different loan options at once through a marketplace, all online. Using a network allows you to quickly compare loan options and potentially secure the best loan for your needs.
Direct lenders versus online credit networks
When working with direct lenders, submit a separate application to each lending office. In the case of a network, you submit one application that is shared with many lenders.
How to get a loan through an online lender network
Using an online lender network to secure a personal loan is somewhat similar to the traditional application process, in that you can expect a credit query and a simple questionnaire. While each network varies slightly, there is a basic overarching process you can expect when applying for a personal loan through an online lender network.
1. Submit an online form and application
After arriving at the network’s site, you will need to fill out some information about yourself, your finances and your need for a loan. At this point you should also prepare for a soft or hard credit check as the network will use your credit to match you with the best loan options you qualify for.
2. Review the loan options
After the network understands your needs and credit score, it will match you with one or more lenders. You can then determine which loan form suits you best. Pay close attention to the available rates, any restrictions on the amount you can borrow and the term.
3. Choose your loan
After you determine which lender best suits your needs, you will likely be sent to that lender’s site where you can take the final steps to secure your loan. Depending on the lender, you may receive your money within one business day. After receiving the loan, it is wise to sign up for automatic payments so that you never fall behind.
Advantages and disadvantages of an online lending network
Before you decide to take out a personal loan through an online credit network, consider the pros and cons of the process.
Advantages
- Ability to compare loan options all in one place. Unlike traditional loan options, a network lets you compare loan APRs, terms, and costs from a single view.
- Broad overview of available lenders. Many networks have relationships with a wide range of lender types. These lenders vary in terms of accepted credit ranges and loan types.
- Lower risk of denial. Because the network has a close eye on your credit, you won’t waste time applying for loans that you might not be accepted for.
Cons
- No face-to-face support. There is no option to arrange personal customer service. This is especially notable for those who may be unfamiliar with the loan process.
- Safety risk. While most networks have strong security and are legitimate, it is possible to come across lending options that may not be reliable. Make sure you only enter personal information on trusted sites.
- Lack of history. The online lending space is relatively new. Unlike the big bank competitors, the process doesn’t have much history. Which does entail the risk of errors.
Who is an online credit network best for?
An online credit network is best for those who are interested in handling the entire personal loan process from the comfort of their home and are confident in using technology to achieve that. The ease with which you can compare loans, combined with the back-end work handled by the network, ensures that you are offered loans that meet your needs.
This also makes using an online credit network a particularly good option for people with bad credit. While borrowers with strong credit have a wide range of borrowing options, those with poor credit should approach the process more cautiously. By applying through the network first, you can avoid the frustration of rejection as you will only be shown financial institutions that can meet your needs.
it comes down to
It’s hard to look past the convenience that comes with getting a loan through an online credit network. The process is quite simple and can take much less time than working with a loan officer in person. Before you start your personal loan journey, consider this as an option while staying informed about personal loan rates.
