Finding the loan that you're looking for is not always easy … it can take a lot of time and cause a lot of frustration to have to drive around to visit different lenders, collecting loan quotes and comparing the interest rates that one lender charges to those of all of the other lenders.
If you'd rather avoid most of that aggravation, you might want to consider looking for a secured online loan. By taking advantage of the lower overhead of doing business online, lenders who are able to offer you a secured online loan are usually able to pass along except interest rates to individuals of all credit ratings.
Online Lenders and Collateral
If you're thinking about applying for a secured online loan, you might be wondering about how you'll handle the collateral that's used to secure the loan and guarantee repayment.
The collateral requirements for online lenders will usually vary from one lender to the next, but in many cases the most common types of collateral are those such as home equity which are easy to work with as simply a matter of paperwork.
Whatever collateral you end up using to guarantee your loan, it's important that you make sure the value of the collateral is higher than the amount that you want to borrow so as to increase your chance of approval while decreasing the interest rate that you'll be charged.
Finding a Loan Online
Before you can apply for a secured online loan, you have to find a lender who is willing to issue the loan. Searching for a lender online is very similar to the way that you find a lender in your local area … the only difference is that instead of visiting the lender in person once you know where they're located, you visit a website and correspond via electronic means and telephone.
Perform a search with your preferred search engine, keeping in mind that the first page or two of results will be your most relevant hits. Open several of the links to lenders, deciding which ones you should contact for rate quotes. Compare the quotes that you receive, deciding upon the one that represents your best loan so that you'll know which lender to apply with.
Receiving Your Loan
Once you've applied for a secured online loan, all that's left is to receive the actual loan money itself. Most online lenders give the borrowed money to loan recipients via electronic funds transfer, sending the full amount directly to the borrower's chequeing or savings account.
There are some lenders, however, who may choose to mail you a check or send funds to you via third party wire transfer … make sure that you know how the lender you choose pays out on loans so that you'll know what to expect once your application is approved.
Of course, after you've received the funds for your secured online loan you need to start thinking about repaying the loan. While physical lenders allow you to make loan payments in person, that can be rather difficult for a lender that operates exclusively online.
Instead of payments in person, many online lenders set up an automatic draft from the chequeing or savings account that they transferred the loan amount to originally. This means that on a certain date of each month, the lender will withdraw the amount of the payment directly from the account. Other methods of payment, such as sending a check or paying via wire transfer, are also available in most cases.