The ways of financing have evolved over time and online financing or obtaining legit online payday loans no credit check, becoming a fact.
Many companies and individuals resort to this type of financing mainly for the convenience of doing it from anywhere and at any time of the day.
In addition, introducing these new avenues for obtaining a loan is an opportunity to have a diversified financing strategy. Diversify in financing and introduce online loans in your company generates robustness and security in the financial structure.
In this Complete Guide to the Online Loan, we go through all the points you must know to obtain one, its characteristics and benefits. We will review from the very concept of a loan to how and in what way it can be requested.
In the following index, the most important epigraphs of this post are detailed:
- Online loan concept
- Characteristics of the online loan
- Advantages of the online loan
- Participative financing platforms for online loans
And finally, an example of an online loan with MytripleA will be briefly explained.
The online loan
This modality seemed unthinkable 20 years ago when we lived in a banking society where the only entities that lent money were, as a rule, banks. In addition, it was done in person by going to the nearest office or branch to discuss the issue of “you to you” with the head of the branch.
Over time, different financial entities appeared with the characteristic feature of being online, thus giving rise to the concept of an online loan. But this type of entities has evolved by appearing companies called Fintech.
The Fintech platforms (finance + technology) were born approximately 10 years ago as a result of the change of mentality in society at the hand of the technological era.
The idea of online loan comes from the new business models and financial alternatives developed with a fundamental technological base that allows the satisfaction of this financial service.
The online loan, therefore, has the main characteristic of making it through the internet; so, a loan is an action of delivering, by a financial institution, a monetary amount to a person or company based on requirements to be filled and subject to a term and interest rate.
Characteristics of online loans
Depending on the needs that you have defined before the loan application, your service will be subject to different requirements or characteristics.
The main characteristics of the online loan are four:
- Financial entity
- Type of interest
The financial entity that processes the loan online
The financial entities have changed a lot in the wake of the social events that took place. Before banking was used as the sole financial provider for companies and individuals in our country, now there are other non-banking financial entities that facilitate access to the same services with different requirements and characteristics, in many cases, more attractive.
Currently, there are internet platforms, apart from banking, financing platforms that are the perfect alternatives for people or companies, giving them the opportunity to access financial services through the Internet.
For example, in MytripleA we expand the range of financing possibilities for companies or freelancers offering online loans under the P2P business model or “peer to peer” which means equal to equal.
It varies a lot to contract the provision of this service with one entity or another so you have to have well-defined points and objectives to determine the entity that best suits my need. The fundamental difference between traditional models lies in the way they operate. Apart from being 100% online, the provision of money is managed by the entity but with the peculiarity in the case of crowdlending platforms such as MytripleA where the money comes from private savers or companies. The management role is based on directly connecting those companies with private savers that finance the operation.
The term on which the loan is subject online
The term types are normally delimited in three. In fact, the Bank of Spain in its Statistical Bulletin differentiates:
- Loans up to one year: denominated short term.
- Loans from 1 to 2 years: constituents of the medium term.
- Loans over 2 years: considering long-term loans.
In general, this conception of terms is for all entities. Depending on this term, other characteristics of the online loan will vary, such as the interest rate.
The amount that constitutes the online loan
The amount will depend exclusively on your needs.
It is very important to determine it perfectly so as not to request more loan amount that is really necessary or, on the contrary, to fall short and have to resort to the service again facing costs and procedures.
The interest rate on which the online loan is offered
Each entity sets a price for money, that’s what the interest rate refers to. It will also depend on the term on which the loan is signed.
In addition, the interest rate is a very important feature of the online loan that will make us opt for one entity or another as it will be a determining condition.
When analyzing the interest rate of your loan, it is very important to take into account if your loan is associated with the hiring of other products, since in this case, the cost of your financing will be higher than the interest rate since You will have to pay for the associated product.
Advantages of online loans
The different advantages that surround this online financial operation are several but you can really highlight three. Let’s see…
The convenience of application in an online loan
It can be requested from anywhere. The Internet can be visited at any time of the day and at any time and from any place, so this processing of the request can be done when you want.
It can be done from home, from the office, from a park … In addition, you can deliver the necessary documentation in the same way, which greatly reduces travel times.
Speed in the operation of the online loan
The speed in these processes is key. Terms are reduced by managing online.
The process is summarized to enter the web page of the entity that you have previously selected and request it. Generally, in the first 48, you usually get an answer.
Clarity of online loan information
The terms of the online loan to hire you to have it in the screen view. What you hire, is what you see. There is no small print that generates mistrust.
Clarity and transparency are what is causing alternatives to traditional ones to be currently booming.
Speaking of booms, the model that in Spain is eating the land of alternative financing of companies is called crowdlending as we mentioned earlier.
Crowdlending is a business model within P2P, explained previously, and is enabling a multitude of SMEs, self-employed and entrepreneurs get financing through loans financed by private investors or companies. The foundation is to connect individuals or companies with financing needs, with individuals or companies that adopt the role of investors in these online loans, financing them in exchange for attractive returns.
This activity is managed through participatory financing platforms whose pillar is the collaborative economy that flourishes, driving the companies dedicated to these activities within the Fintech.
Participative financing platforms for online loans
The platforms of participative financing have the only purpose of putting in contact people or companies that want to lend their money to other people or companies that need it and have been previously analyzed.
These platforms with 100% technological base and 100% online service management, have a team of professionals behind them who work to make this possible. They act as intermediaries, reducing as much as possible the costs, the periods and facilitating, as far as possible, everything related to the operation (documentation, fees …).
Example of the online loan with MytripleA
From the MytripleA website, you can access all kinds of information before performing the operation that interests you most if your intention is to invest in online loans already granted to a company, or if you need an online loan
On the investor’s side, you simply have to register by filling out a simple form and then provide the necessary personal documentation to start trading and validate yourself. When you are validated, you will go to the marketplace or market section of the platform where the approved and signed operations are for you to choose the one that most identifies you and contribute this way, with your financing contributing the amount you want (from 50 €)
On the other hand, if what you need as an independent, entrepreneur or SME is the granting of an online loan, the process is similar.
- Go to the financing section and request the online loan. In the simple form, you will have to fill in some necessary and basic data
- Once the assistant has been completed and the simple documents have been submitted, it is analyzed by our risk professionals department to manage the viability. Then the Reciprocal Guarantee Societies are derived to make their respective analysis.
- If you pass these procedures, the application is approved and then it is available to investors who will begin to lend you their money. Once the amount is completed, the loan is formalized online and in a record time you will have the money in your account.