How to Compare Online Direct Lenders

You don’t always know when a financial disaster will strike. Your car’s transmission doesn’t have a countdown to when it will blow, and your body won’t schedule a convenient time when to get sick. These things are unpredictable, so your next unexpected emergency expense may catch you off guard and leave you scrambling to find the money you need.

In a pinch, online direct lenders offer quick loans online to help you with unexpected emergency expenses. But jumping on the first direct lender payday loan can be risky if you lock into unaffordable interest rates.

That’s why you need to compare online direct lenders carefully in an emergency. Here are three ways to ensure you’re getting the best possible option for your needs.

Compare Rates and Terms

By virtue of being online, online direct lenders make this first task super simple. You don’t have to visit a physical branch or speak to someone face-to-face to find out their rates and terms. You can open a web browser and hunt down the rates and terms without leaving your home.

Rates and terms can vary drastically between online lending companies, so pay close attention to the types of products they offer.

Payday loan direct lenders, for example, grant short-term loans that require you to repay them back in one lump sum. This due date tends to coincide with your next payday, which is how they get their name.

Installment loans direct lenders, for contrast, earn their title because they break up your repayment over multiple installments. You may get help managing payments for emergencies with an online installment loan that offers a longer term than most payday loans.

Double-Check Your Budget

You can’t tell if the rates and terms are affordable until you fit them into your budget. Take the time to see if you can realistically meet each payment as outlined by your terms.

If you can’t make these due dates without putting another regular bill on hold, don’t go any further with your application.

The same advice holds if you would only be able to afford your installments by paying a day or two late. Late payments come with steep penalties like fines and added interest, not to mention the possible damage to your credit history.

Read the Online Reviews

Legit online lending companies provide a valuable service that many people appreciate, and their reviews reflect that.

You can take advantage of these reviews to see the borrowing experience from a different perspective. This complements the factual details of your loans with subjective info about their customer service, so you can get an idea of how a lending company may treat you.

Look at reputable rating services like TrustPilot or WalletHub. Read through all the ratings for any given company to see what everyone has to say, from those pleased with the service to those who are deeply dissatisfied.

While these extremes can give you a different look at a company, you’ll want to consider the average overall mark, too. Lenders that display a “great” or “excellent” rating earn these top marks by consistently delivering what they promise.

Bottom Line

Finding the best online lender for your needs is a multi-step process. While checking through this list of tips may front-load the time it takes you to find a personal loan, it’s worth every second. Comparing rates, budgeting, and reading reviews pay off in the end by helping you find the best possible option for your needs.