If you are looking for a small or medium-sized loan, then consumer loans may be the right solution for you. Here we help you find out what to look for with the different companies.
In this way, we hope to give you a better starting point for choosing the loan that suits you best. See overview with the best consumer loans.
What are the advantages and disadvantages of consumer loans?
A good way to get an overview of what a consumer loan really is is by looking at the advantages and disadvantages. Of course, as with all other things, there are both. But if you are smart and think carefully, you will largely avoid the disadvantages that exist.
- You don’t need security. For most, this is perhaps the biggest advantage. It gives a safe feeling that you do not have to provide collateral in your assets, as you do with other loan types.
- High flexibility. There is no one here to know what to spend your money on. In addition, you have the freedom to (to a large extent) choose the amount and repayment time to suit your needs.
- Get requirements. It is quite easy to get approved for a consumer loan, if only you meet the basic requirements. This may include age and citizenship requirements, as well as no payment notes on you.
- Little preparation. Applying for a consumer loan is very easy, as it requires so little documentation. Mostly it is managed online through a form. It gives you a simple application process.
- Quick reply and money in the account. You will often receive answers within a short time when you submit your application online. Of course, this varies between lenders, but generally there is a very fast response time and payout time.
- High interest rates. Since you do not provide collateral, the operators have a greater risk associated with the loan. This means that the interest rate will be a bit higher than for other types. It is important to investigate, where you get the lowest effective interest rate. Because it is this one that shows what the cost of the loan really is in the year.
- The credit rating can affect interest rates. Before you can be approved, the company must make a credit assessment. Here you get a credit score, depending on how good your finances are. If this credit rating is low, it may mean that the lender offers you a higher interest rate. For example, it is always important to obtain a non-binding offer so that you can see exactly what terms they can offer you.
How to apply for a consumer loan without a security
It is important to remember that it is always free to collect offers from the company. By law, there should be an example of any loan on the company’s website. But it is important that you bring in a non-binding offer so you can see exactly what loan you can get. This makes it easier for you to compare, where you get the best terms.
Once you have collected offers from a variety of different types, look at the effective interest rate. This is the annual interest rate on the loan, plus all other costs and fees, which may be involved. It is this one that gives you the best picture of what the loan will actually cost you. Therefore, the effective interest rate should play a relatively large role in your decision on which company you choose.
Today, the application process is very simple and fast. Everything is done online, and for most people just fill out a form with basic information. Keep in mind that it is a completely free application with no obligations, so you can collect offers from as many as you want!
Once you have found the loan agreement that you are happy with and that meets your needs, then just sign it. You can easily do this again online with Bank, so this process is also very easy. Then just wait for the payment, which usually comes no later than the day after the loan has been approved.
Now, hopefully, you have gained a little more knowledge and information in the area, so you can better make a qualified choice. See the different companies in our overview and start looking for the best consumer loan online.
Note that you cannot be sure of finding the best loan on the site, as there may be other cheaper online loan options.