There are several options available to individuals if you want to borrow money online. These include payday loans, installment loans, auto loans, where you do not even have to visit a bank or institution in order to get approved.
With banks becoming increasingly more difficult to access, with opening times that can’t always be adhered to for an individual with a full time job, it’s no wonder that an estimated 5.9 million US households were “unbanked” in 2021, essentially meaning no one in that household had a checking or savings account at a credit union or bank. If you are in urgent need of some fast cash, this is not as big an issue as most people seem to think, with there being plenty of alternatives to banks when it comes to borrowing money online.
Different Ways To Borrow Money Online
Payday Loans
One way to borrow money online is payday loans. These loans are usually borrowed over a short term, with the amount borrowed being paid back over an average term of 14 days. Payday loans do often come with higher interest rates than a loan from a traditional bank, but are usually quick and easy to access, with all the relevant documentation able to be filled in online.
With payday loans, it is not an issue if you do not have a good credit score as there are many lenders who will offer loans to people with bad credit, as they will look to take other factors into account such as income, residential status, or employment history.
With payday loans being so readily available across the US, this is one easy way to borrow money online. However, it is important to note that payday lending is only legal in 37 of the 50 US states and that there are regulations that exist depending on the location that you live in. Some examples are summarized in the table below:
| States | Loan Amount | Loan Term |
| Alabama | $100-$500 | 10-31 days |
| California | Up to $300 | Up to 31 days |
| Colorado | Up to $500 | Up to 180 days |
| Iowa | Up to $500 | Up to 31 days |
| Kentucky | Up to $500 | 14-60 days |
| Louisiana | Up to $350 | Up to 30 days |
| Missouri | Up to $500 | 14-30 days |
| Ohio | Up to $1000 | 91-365 days |
| South Carolina | Up to $550 | Up to 31 days |
| Tennessee | Up to $500 | Up to 31 days |
| Texas | Unlimited | 7-180 days |
Installment Loans
A second loan type that can be borrowed online is installment loans. This type of loan differs from a payday loan in the fact that the money can be borrowed over a longer period of time, ranging from 1 month all the way up to 60 months in some cases. The lender will require you to make regular repayments, which will also include interest, and as long as the loan is paid off in full, your credit score is unlikely to be affected in the long run.
To be eligible for an installment loan, you need to fit certain criteria, including being a US citizen, be over 18 years of age, own a mobile phone, earn a minimum of $500-800 a month and be able to afford monthly repayments. A live checking account is also usually required in order for the lender to deposit the money directly into your account, as the funds are borrowed online. In some cases your loan application can be declined, but there are ways that you can increase your chances of getting your loan application approved.
Title Loans
Title loans primarily include using your car as collateral against a loan. An advantage of this is that the lender allows you to borrow the money against your asset, but this also means that if you fail to pay the repayments on the loan, the lender is able to repossess your vehicle in most cases. Title loan applications can be filled in online, but the lender may need to see your car in person before offering you a loan against the asset, which usually varies from 25 – 50% of the vehicle value.
Car title loans will typically be structured in 1 of 2 ways. The first option will be for the loan to be paid back in full, along with any interest, within the first month of the loan being offered, otherwise known as a single payment loan. The second option is via installments, which depending on the lender will usually be paid back over 3 to 6 months, along with the interest payments also. Before taking out this sort of loan, make sure you can afford the monthly repayments, as the Consumer Finance Protection Bureau found that 1 out of 5 people who take out title loans end up getting their vehicle seized.
Guaranteed Loans
A guaranteed loan is a type of loan that is guaranteed by a third party, which means that the third party will take on the debt of the loan if the borrower defaults. Individuals who take out guaranteed loans typically have bad credit, but due to them having a guarantor, this means the lender is much more likely to get their initial loan back. Types of guaranteed loans include mortgages, government back student loans, and payday loans.
Guaranteed loans are available from a number of lenders, including payday lenders, and are available in many states including Alabama and Texas. Typical criteria in order to be eligible for a guaranteed loan includes being over 18 years of age and having a minimum income of $800.
Concluding Thoughts
If you are looking to borrow money online, there are plenty of ways to go about this. Just make sure that if you are looking to take out a loan, that you can afford the monthly repayments, especially if you are using an asset as collateral. If you do not wish to join a bank, this just proves that there are alternatives to your traditional loan, but they do come at a higher interest rate, so it is always worth weighing up the pros and cons.
