I don’t know about you, but I think online lenders are just as reliable as any other financial companies. They come in handy when there seem no one else is around to help you financially. These loans are your superhero in times of unexpected emergencies especially when your credit rating is not looking so good.
What’s great about online lenders is the convenience they provide to their consumers. You can apply from your home or office at any time. All you need to accomplish an application is a computer or a smartphone or tablet, and of course the internet.
The turnaround time of these loans is quick as lightning. Majority of online lenders transfer funds into bank accounts after loan approval within the day of application. Others may do this by the following day or week.
You can easily qualify for a loan with online lenders. You don’t need a perfect credit history to get a loan with online lenders. Even with bad credit, you will get multiple options. What these lenders want to see is whether you have a stable income in which you can still afford to pay the loan.
The only drawback that you will notice about online loans is that they have a higher cost than traditional loans. Check out the fees and rates that the lender will charge you, and make sure that the cost could fit into your budget. Some lenders may also offer the option of early repayment of your loan without any additional fee. This is a great option because it will help you save on fees. However, some may charge more interest rate if you settle your loan early.
The rates and charges vary from lender to lender, so take some time to compare different lenders. While it is tempting to jump immediately into any loan offered to you, check with other lenders first because you might get a much cheaper loan from other lenders.
Online lenders are growing fast in the UK. Let’s check out one of the most prominent online lenders in the UK, which is Satsuma.
About the Company
Have you heard of Provident Personal Credit before? Satsuma Loans is a trading name of that is over 200-years old company. Launched by doorstep lender Provident Financial in 2013, Satsuma is an online-only lender that offers small, short-term loans.
Satsuma Loans is a newbie in the personal loans market. However, through its parent company, Provident PLC, their roots go back over 200 years. Pitching themselves as a friendly alternative to payday loans, the Satsuma offers loans that are more flexible. Satsuma is growing fast in the finance business with over £5 million of loans as of 2015, increasing from £1.8 million the previous year.
Satsuma Loans charges a typical APR of 991% as of March 2017, and its maximum interest rate is 1,575%. First-time customers can lend up to £1,000, which is payable over a 12-month period. It usually incurs an interest charge of £990 on a £1,000 loan.
Repayment plans of Satsuma Loans are fixed and are done weekly. Instead of paying monthly like some other lenders, you can make weekly repayments instead for your short-term loans in Satsuma.
This company claims that there are no hidden fees or charges with their loans. Satsuma Loans charge no other fees at all such as arrangement fees, faster payment fees or even late and missed payments.
If you get a loan approved with Satsuma Loans, you can receive the funds within an hour as long as it’s between 6 am and 11 pm. After you have chosen your weekly repayment day, Satsuma Loans will set up a Continuous Payment Authority to ensure the loan is paid. If you do find yourself with additional funds, then you can make overpayments. If you wish to, you will need to call their call centre for assistance.
When you apply for a Satsuma loan, they will ask for a range of information from you in order to determine whether you’ll be able to pay back the loan, which then goes towards their approval decision.
You’ll need to provide them with your last three years’ address information, your monthly expenses, and you’ll need to agree to a credit check. Even if you have been declined credit from one lender, you still may be able to apply to Satsuma as long as you haven’t been bankrupt.
Other basic requirements include your age that must be at last 18 years old and you must be a UK resident.
Many consumers are impressed and have appreciated Satsuma because of its features specifically because they don’t charge any fees. Yes, you read it right. There are no fees at all, which is quite rare when it comes to the payday loan sector. So, all you will be paying is your monthly repayments, which comprises of your loan amount and the interest rate.
On the contrary, Satsuma rates and APR are at the higher end of the pricing spectrum in this category. When it comes to simplicity and another consumer sentiment, Satsuma hasn’t scored as highly because of the fact that they lack post-payout facilities like statements and payment holidays.
Satsuma is one of the most expensive loans, with an extremely high-interest rate. If you’re considering taking out a Satsuma Loan, the usual high-cost short-term loan health warning applies. Make sure you can afford the loan and that you can keep up with your repayments.
Although you can benefit from the loan feature of Satsuma Loans at not charging any fees if you do miss a payment, it’s never a good thing to have late or missed payments showing up on your credit file. This will further give you a bad credit rating.
Unlike payday loans, Satsuma Loans repayments are instalment. Payday loans are paid in a one-time lump sum, which can be a real pain. Imagine a huge portion of your paycheck will go directly to your loan. In most cases, this would result in more reapplication of your loan, leading you to a downward spiral debt trap. Fortunately, with Satsuma Loans, you can make a good monthly budget on your repayments and other basic expenses.
Loans offered by online lenders come with extremely high interest rates. This is why they are only intended for emergency expenses or as your last resort. Think it over whether you really need the loan or not.