Whether it’s for needs, unexpected medical bills, or capital for a small secondary income, loans can be a huge help. And with today’s digital world, many prefer applying for personal online loans. That shouldn’t come as a surprise, as it’s a convenient way to borrow money.
At the same time, online lending is still frequently misunderstood by many. Some think it’s sketchy, not secure, and unreliable. Unfortunately, these misconceptions not only negatively affect these lending businesses, but also drive away potential borrowers instead of availing of their convenient services.
Lack of trust, security, and legality
Many fraudsters trick potential borrowers to get their money. And now that the world has gone digital, so have they, and they employ various online scam techniques to do this. That, of course, includes posing as legit online money lenders. They also take their victims money or personal information, sometimes even both.
It’s one of the reasons many are wary of the trustworthiness, security, and legality of even reputable online lenders. It’s an understandable concern, but that shouldn’t make you afraid of all online lenders.
This is because online money lenders in Singapore are strictly guarded under the Ministry of Law Singapore, and their legitimacy and adherence to Singapore’s strict guidelines are guaranteed. They also use advanced encryption and security measures to protect borrowers’ personal information. To ensure you’re dealing with a legit online lender, visit the Ministry of Law’s list of licensed moneylenders.
Complicated and unsecure application process
Some think applying for an online loan would compromise borrowers, as they believe online moneylenders don’t require documents. That, however, isn’t the case, as online lenders also rely on documents to verify your identity and assess your creditworthiness.
While the application is online, borrowers must still submit hard copies of the required documents, such as proof of identity and residential address, income details, loan repayment history (if any), etc.
Perception of high interest and hidden fees and charges
Last but not least, online moneylenders don’t have higher interest rates and additional hidden charges and fees. Rather, the interest rate depends on the principal fee, what the government allows, and what the moneylender will decide on.
For example, 111 Credit’s interest rate is no more than 3.92%, and can even be lower depending on the borrowers’ credit profile. Also, all legit online moneylenders are required to show their fese with clear and detailed information. Therefore, the belief that online loans have a higher interest is very misguided.
Conclusion
Online lending is still often misunderstood because of all sorts of fraudsters on the information superhighway. This has created misconceptions that they have higher interest rates and charge hidden fees, compromise borrowers’ privacy, and are lax with their processes. Hopefully, with the facts shared above, these wrong assumptions over time will be broken, and borrowers will not be afraid of going to their local online moneylender if they need financial assistance.
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