Did you know that apps can cure some diseases? Yep, that’s right. I don’t mean that they will operate a surgery on a sick body part or give prescriptions. What I mean is that they use artificial intelligence knowledge to detect some diseases which helps in early treatment.
Now, let’s get back to our business world. Did you know that it’s possible to borrow money by just downloading a mobile app? If you didn’t know, then I’m glad to give you this information.
Loan apps can be used to borrow many types of loans including payday loans. But what are payday loans? Let’s figure it out.
What Are Payday Loans?
A payday loan is simply a small short-term loan granted by lenders with an agreement to be repaid on the next salary date. By ‘small’ loan I mean it has a small limit of up to $1,500. This loan is commonly known for its high interest of over 400% APR.
It’s always recommended that you have a good repayment plan before taking the loan. But thankfully, I know you have the plan and that is why you are still reading, huh!
Anyway, apart from the high interests, there are some advantages the payday loans have. For instance, the loans have fast approval time and loan granting. There are also no credit checks done or collateral needed during application and that is why they are popular.
The loans can be accessed from online lenders, physical banks, or even credit unions. The online lenders can let you apply for the loan from their websites or loan apps. So, how do these loan apps work?
How Do Loan Apps Operate?
Loan apps let you borrow a loan without the need of taking yourself to a loan institution. These loans may be operated by online lenders, banks, or credit unions with an online presence. To use apps like dave you’ll need to download them from the Google Play Store for android users or App Store for iOS users. Once downloaded, you can follow the below procedure:
After downloading the app, you’ll be directed to enter your email address and password for ease of logging in. In short, you’ll be required to sign up for the app.
#2 Update Profile
After signing up, your profile will need to be updated. You’ll be required to fill in your names, location, contact information, gender, age, and many more.
#3 Apply for the Loan
Once the user profile is updated, you can now apply for the loan. Be sure to check the requirements for the loan before starting the application.
During the application, you’ll be required to state the desired amount to borrow and provide necessary documents such as your employment reports, a copy of your ID, and bank account reports. This is in case you are applying for a payday loan.
Other loans may require additional documents such as your credit score reports.
Note that some loans cannot be applied using mobile apps. For instance, loans that require collateral will necessitate the need to visit a bank for collateral inspection.
After filling out the application form and submitting the required documents, you can wait for loan approval which takes less than an hour. Once approved, the funds will automatically be sent to your account.
Why Are Loans Apps so Useful?
According to CNBC, there are about 23,000 payday loan lenders in America. Here are the reasons why:
- Provide convenience
Imagine applying for a loan while comfortably seated in your chair watching your fav movie. How convenient is that? That is what mobile apps offer. They save you a lot of time and energy from visiting a loan institution.
- Fast loan processing
The processing time for apps is mostly less than an hour where after approval the money will automatically be sent to your account. This is so useful especially when you are in a financial emergency and require the money instantly.
- Accessible 24/7
Unlike physical loan institutions which are closed at night, during holidays or other special days, mobile loan apps can be accessed at any period of the day.
- Are secure
Before an app can be is uploaded to the Google Play Store or an App Store, it has to pass through some security checks. The app also has to meet some requirements. Hence, it’s completely safe to use these loan apps.
- Help to manage your loan
After loan approval, loan apps can let you see your outstanding balance and the repayment deadline. They also send notifications through emails or SMS to remind you of your balance so you never forget to pay or miss a payment.
Loan Apps vs Banks
Both loan apps and banks provide loans. But what should you choose between the two? Well, if you need urgent cash or are lazy to visit a bank, you can comfortably choose a loan app. Also, the good thing about loan apps is that they can be accessed at any time.
Since there are also no physical buildings to maintain, this can mean lower costs to borrowers.
However, if you prefer face-to-face service, you can opt for the physical banks.
Loan Apps vs Direct Lender
A direct lender is a loan institution other than banks that offers loans using direct lending. Direct lending is the process of providing loans without the use of intermediaries such as brokers or private equity firms.
Again, the benefit that the loan apps have over direct lenders is still similar to banks. They include:
- Fast loan approval in less than an hour;
- The loan can be applied at any time;
- Saves time for visiting the institution physically;
- Can let you manage your loan since you can easily see your balance and the due date;
- Uploading documents is easy.
Direct lenders are also advantageous due to the personalized service. Also, loans that need collateral will require you to visit the direct lender for inspection.
However, if no collateral is required and the personalized service is not that important, you can use the loan apps.
Cases in Which Loan Apps is a Choice
- When you need instant or emergency funds.
- When you don’t need to physically visit a loan institution.
- When you need to apply for the loan in holidays or at night times.
- When the amount to be borrowed is small.
- When there are no collaterals involved.
If you are thinking of getting a loan, try the loan apps to experience their fast and simplified services.