Applying for an Online Consolidation Loan
Online consolidation loans are done completely online. They are easy, confidential and fast in most cases. As long as nothing has to be verified by faxing paperwork to the lender, your application could go through in just a few hours or less. Your credit score will be checked without impacting your score in just a couple of minutes.
If you qualify for a loan, multiple loan offers will be presented to you instantly. You now get to choose the offer that fits your financial situation. The online loan company would then review and verify the application for the lender. The team verifying your application may need you to fax more documentation on your recent employment such as pay check stubs or ask for recent bank statements to be faxed, in order to support your application.
There is never an application fee for filling out an online application. The lending company would charge an origination fee once the borrower has accepted the loan from the investor. The fee, of one to five percent of the loan would be deducted from the loan proceeds and the balance will be deposited into the borrowers account. Some lenders do not cover all states in the United States. Check with the lender to make sure they cover your state before filling out the application.
Effects on Credit Rating
Paying back your loan on time is extremely important. If you are late, miss a payment or default on the loan, it is reported to all the credit agencies. This will give you a negative mark on your credit report. Most lending companies will give the borrower a 10 grace period and charge interest after that time. Borrowers who are always late will be reported to the credit bureaus.
The investors will never see your information that identifies you personally. They see your application for your needs, credit score and how you can pay back the loan. The investors will be going over your application so they can decide if they want to invest. Your online application will be done in complete confidence.
Investors will want to know that you qualify for a loan. Basic requirements usually include;
- Must be a United States Citizen
- be at least 18 years of age
- Have a bank account that is verifiable
- Completed application
- Credit Bureau check
Most investors will also want to know your debt-to income ratio, credit history, number of accounts you have open, and your payment history. Investors may also want to know how many times in the last six months you have applied for loans.
Not all investors will give you the same terms and conditions for the loan you are requesting. You will need to read each offer over completely and evaluate your options from each investor. Some investors will give you a better interest rate, or a longer repayment time and some investors may not fund your whole loan amount.
If you have problems with any questions you can ask the lending company for some help before it is sent to the investors. The lending company will need to verify your name, address, phone numbers, employment, and email and bank information.
Your bank account will be verified by initiating an electronic debit and credit amount of a dollar or less. This will accurately inform the lender and investor that the loan can be funded into your account and payments can be taken out automatically.
Once approved for the loan, you can expect the funds to be in your account within four days. Some loans may take up to 14 days to be approved due to more information having to be faxed to the lending company for verification. The end results for the borrower would be a loan which could be used for consolidating credit cards, smaller loans owed or for anything needed to help the borrower to get out of financial distress.