Many consumers prefer online personal loans when coming to funding their home improvement project because of the faster approval time. The downside of a bank loan is that you have to make a trip to the bank and wait a long queue to submit the application. You should not expect that your loan will quickly get approved by the bank in a few weeks. The bank will take a few months to go through all your documents to make sure that you meet every single one of their criteria.
It can be frustrating waiting for your loan to get approved by the bank and it will cause you to have to postpone your home improvement project. Some home improvement projects are urgent for example leaking of the plumbing system that cause flooding in your home. If your home improvement project is urgent, it is best that you apply an online loan. With online loans, you can apply from the comfort of your home by simply filling an online form. It takes only minimal time for the loan to be processed and approved. The average time of receiving the fund is 1 – 2 days after the application is approved.
It is cheaper to use online personal loans to fund your home improvement project because of the low interest rate. The interest rate usually depends on your credit score. With a good or excellent credit score, you should be able to get qualified for a low interest rate. Online personal loan lenders charge cheaper interest rate because they don’t have a lot of costs such as renting a physical office. Most online personal loans have fixed interest rate so you will pay the same interest rate during the loan term. The majority of them are also unsecured personal loans that don’t require you to put any collateral.
Another reason is that online personal loans offer sufficient funding for covering even a big home improvement project. You can borrow a loan amount in between $2,000 – $100,000 from online lenders and the average loan term is 1 – 5 years. The amount you can get approved will depend on your income. They will require you to submit the pay slip for the past few months so it is important to have a steady job prior to apply for the loan.
You can only be eligible for the bank loan if the entire loan amount that you apply gets approved. There is a type of online lending platform called peer to peer lending that allows your loan amount to be funded by individual investors. In peer to peer lending, your loan can still get approved even if only 60% – 70% of the individual investors fund your loans. This means that you at least can borrow some of the money out of the actual loan amount you apply for.