How an online loan works
With an online loan, everything happens online without you having to set foot in a bank or speaking to a loan consultant. You can complete the whole application, from selecting your loan amount and term, to the credit and affordability check on your phone or PC.
Some lenders offer both traditional loans from their physical locations, as well as online loans from their apps or websites. Others, like Unifi, are 100% online.
Online loans are usually smaller, short-term personal loans. They are quick to apply for and pay out fast, directly into your bank account.
What can I expect during an online loan application?
- Setting up a profile
When you sign up for an online loan, a personal profile is usually generated for you that you can access with a unique username and password. The username is often your ID number. This is handy, because you can start your application and go back to finish it later, without the need to fill out all of your information again. If you successfully complete a loan application on www.unifi.credit, you can also sign back into your profile to track the progress of your online loan application. There are even fewer steps when you apply for future loans with Unifi, since we already have most of your information stored on your profile.
2. Be ready to give personal and banking details
How an online loan works is that the lender verifies your identity using an ID number. You will likely also have to provide your banking details. Since the money goes straight to your bank account if your application is successful, this tells the lender where to send the money. Your banking details could also be used to verify that the personal details you’ve supplied are true and correct. This protects both you and the online lender against scams and identity theft.
3. A credit check
Most online loans are unsecured, which means that you don’t need to take out the loan against assets such as your house or vehicle (security in case you don’t pay back the loan). Instead, the online lender runs checks to ensure you can afford the loan, based on your credit record and income.
You need to agree to a credit check at some point in the loan application. When you agree, an automatic credit check runs and the lender can immediately see whether you’re eligible for the loan.
4. Income and expenses info
Another step in the online loan application, is to provide your gross and net monthly income. Your gross income is your total salary as reflected on your payslip, while the net monthly income is the gross salary minus expenses such as employer medical aid contributions. You will also be asked to fill out your total monthly expenses, things like rent and groceries. Some lenders can automatically get information about your current credit commitments when they run the credit check. They can then automatically add your credit-related expenses such as monthly instalments on a store or credit card.
5. Proof of income
Your proof of income shows a lender whether you’re employed and earn a stable income, which is an important step when you apply for an unsecured loan. Some online lenders may ask for up to three months’ latest proof of income, while others, like Unifi, only need one. Proof of income could be your bank statement(s) and/or payslip(s).
With an online loan application, you will need to scan in your document(s) if you don’t have digital copies. Or, the online lender may ask you to email them your documents. Unifi offers you the option to automatically send us your bank statement from your online banking account. This is 100% secure and done through a trusted third-party tool that “speaks” to your bank. The tool gets permission to retrieve your bank statement from your online banking. Don’t worry, they won’t be able to see any of your other banking details such as your PIN!
Is an online loan safe?
With rapidly advancing technology have come equally advanced ways to protect you from threats in cyberspace. When you take out an online loan, ensure it’s from a reputable, registered credit provider. Unifi has all the required security systems and checks to make your online loan experience safe and secure.
What are the benefits of an online loan versus a traditional loan?
Now that you know how an online loan works, you’ll see that the main benefits of these loans are speed and convenience. You can apply for cash anytime, anywhere. The money hits your bank account within minutes, or at least on the same day. The application is simpler and faster, since you won’t have to battle your way through the piles of paperwork that come with traditional loans. There are no queues and you won’t have to travel to a physical location.
If you’re ready to take out an online loan, it’s as simple as clicking here and starting your application.