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Why Online Lenders are Better than Payday Lenders?

Due to everyone’s demand for loans, hundreds of online lenders have reached out to borrowers through various marketing methods. In Facebook alone, you can see these online lenders trying to outcompete each other. Beyond the online lending arena, payday lenders remain prosperous. While these lenders are less threatening nowadays, they still have numerous disadvantages. Because of such disadvantages, online lenders earned a solid and positive reputation.

Fair Interest Rates

Payday loans are notorious for their obscenely high interest rates. If you’re not careful, you may end up paying more than two times your principal loan – service charges still excluded. Are you wondering why payday loans have these high rates? This is actually their risk management process. Since a payday loan is unsecured, the lender can’t collect your assets if ever you can’t repay.

Rather, the personal loan lender philippines will just send their ‘collection hounds’ to go after you. Commercial online lenders are the best options because their interest rates are fair. The line between a commercial online lender and payday lender is thin. Some payday lenders also operate online as well.


Better Support

Commercial online lenders have a better support system unlike onsite payday lenders. Whenever you have concerns, online lenders will suggest all possible solutions. Most online lender websites also have useful loan-related content that you can read. Now, you won’t see that in shady payday loan offices!

Also, online payday lenders allow open negotiations. This will give you greater financial advantage since you have full control on repayment. During negotiation, you must be honest in presenting your situation. Not all lenders have flexible conditions, so you need to scour the Web for the right providers.


Improves Financial Reputation

Online lenders can improve your financial reputation by updating your credit status or vouching you in many instances. While not all lenders do this, you’d still have a better shot than payday lending offices. Payday lenders, especially the independent ones, don’t care about your credit rate. Business is business, and they’re only interested about your capability of repayment. But then again, not all payday lenders will neglect your credit status. Through extensive research, you may actually find a payday lender who ‘cares.’


Even though online lenders are better, it’s important to know that not all payday lenders are bad. A large percentage of payday lenders are now being regulated, so you can borrow safely. On the other hand, not all online lenders are operating fairly. Through proper research, you’d know which lenders can really offer fair terms.

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