Thanks to technology, everything you can think of is available through our smartphones, and loans are no exception! When researching loan options, you will likely come across mobile loans—loans that you can apply for on your smartphone. Not only are these applications usually easier than an in-person loan application, but they can also be completed at any time, anywhere. When you are ready to apply, you’ll need some documentation and information to submit your application. Below you will find everything you need to know about mobile loans and whether applying online vs. an in-person loan is the better fit for you!
How Does a Mobile Loan Application Work?
When searching for a loan option, almost every lender, big or small, will have an online application that borrowers can fill out to apply for a loan. You can complete these applications with your web browser of choice, from a desktop, laptop, or tablet.
Now Mobile loans make these online applications even more convenient. Instead of having to get onto a computer, lenders will provide you with at least one, if not both, of these application options:
- A Mobile App — whether you are working with an Apple, Android, or Google phone, if a lender has an app, it will likely be in all three of these app stores. You will have to download the app before using it; in some cases, you may also need to create a log-in.
- An Application From Your Mobile Web Browser — any web browser you can use on your computer (Safari, good chrome, internet explorer, etc.) is also available on a mobile device. To fill out an online application on your mobile phone, all you have to do is head to the lender’s website, find the application, and fill it out.
The convenient thing about mobile loans is that the entire process from beginning to end is handled digitally. The application, the credit approval process, credit decisions to determine the annual percentage rate, maximum loan amount and other loan terms, and even distribution of approved funds you can complete online.
What Will an Online Application Ask About?
Lenders or financial services companies like banks or credit unions all work a little differently. However, in most cases, the application for their loans will ask about similar factors before deciding on a loan offer. When you are ready to apply for a mobile loan, be sure to have documentation that answers questions regarding the following information:
- Your Identity — when applying for a loan online, you will need to provide information like your social security number or TIN to prove your identity. Some lenders may also ask you to provide an attachment of a government-issued photo ID.
- Income and Ability to Pay Your Loan — you will have to provide an annual income amount and proof of it through documents like bank statements or pay stubs. A lender may ask about your work history and your monthly bills and expenses to figure out your ability to repay your loan.
- Down payment requirements, if there are any.
- Your residence — you’ll have to enter your complete address information. To verify it, attach documents like mail or bank statements.
- Information about collateral if one is involved
- Your bank account information (for direct deposit purposes), lenders usually ask to verify your bank account information after approval.
- References — sometimes, a lender may ask for a few professional references.
The application process will be pretty straightforward; you fill out an application with the required documents. You will have to consent to a hard credit check for your lender to get the credit information they need. Once submitted, find out about mobile loan approval through the app, online, or email. If approved, you can review the loan agreement and decide whether the right loan option is for you. If so, sign the loan agreement and get the funds. The money can be sent straight to a checking account in most cases.
Are Mobile Loans the Right Option for Me?
Although mobile loans can be an easy way to apply for the funding you need, they may not be the right option for everyone. Below are some pros and cons of mobile loans and a mobile loan application:
Some Advantages of These Loans
Mobile loan options are extremely fast, and it only takes a few minutes for the loan request process. Fill out and submit an application. Processing is usually quick, too; in fact, you may find out about pre-approval instantly and then final approval as soon as the very next business day. There is no need to make appointments, worry about a commute, or even leave your couch! And if you are facing an emergency, the convenient thing is that you can apply on the weekends, 24 hours a day, and even during major holidays!
Another perk of online loans is that you can easily compare loan terms and options. The comparison process can be as simple as opening up a few different pages on your smartphone. And then taking a look at the various loan terms like loan amount, interest rates, and repayment periods available.
A Few Potential Disadvantages To Think About With a Mobile Loan
A few things to keep in mind with mobile loans are that you need to know how to use your smartphone reasonably comfortably. Applying for online loans will involve a more complicated process than paying a bill. Instead, it can be more like a job application.
Another thing to consider is that not all loan options can be processed entirely online. i.e., a mortgage loan—you will likely not find complete mobile home loans online. You also have to be very careful when applying for online loan options. With the wrong lender, your personal information may be at risk. One more thing to keep in mind with online loans is that you won’t get a face-to-face experience with a loan agent.
And so, depending on your level of comfort and financial situation, an online loan may or may not be the best option for you. Review the pros and cons before making your decision!
What Kinds of Loans Have Mobile Applications?
There are all kinds of loans that provide the entire loan application process, which you can complete online; here are the most common ones:
Personal Loans Online
A personal loan is typically an unsecured loan that you repay in fixed monthly payments. You can find a personal loan at a bank, credit union, or private institution. Personal loans are versatile in their uses, loan terms and even flexible with credit score requirements. Loan term lengths can range from a few months to a few years. Because personal loans are some of the most popular loan options available, you will likely find multiple lenders that offer an application process that you can complete with your mobile phone.
Payday Loans With Your Mobile Phone
Payday loans are short-term loans for people with bad credit. Loan amounts are usually for a few hundred dollars, and the borrower must repay it in a few weeks. Although these loans are flexible for a poor credit score and are fast, they can come with extremely high-interest rates and hidden fees, potentially leading to a cycle of debt.
Credit Cards as a Mobile Loan
Credit cards are a form of revolving credit, in which loan amounts range from a few hundred dollars up to thousands. The amount you will get approved for and your interest rate will depend on your credit score and income. Although credit cards can be convenient for multiple purchases, having multiple credit cards can lead to debt quickly. You will also have to worry about things like credit limits and the different fees if you have overdraft protection in place and accidentally spend more credit than you have. And so, before taking out multiple credit cards, learn about the various strategies people use to manage their credit cards carefully.
Mobile Title Loans for a Bad Credit Score
Title loans are short-term loans. They are secured lending, which uses the borrower’s vehicle as collateral. When applying for one of these loans, you can submit information and documents (such as the title, registration, make and model number, etc.) through pictures from your smartphone. Most lenders ask that you attach these documents to the application, or you may be able to email them.
A lender will determine the loan amount and eligibility by the value of your vehicle, income, and ability to repay the loan. Although these loans can be convenient, you’ll find an extremely high-interest rate. On top of that, if you cannot make your payments, you could lose your vehicle.
As you can see, there are plenty of mobile loans available for borrowers, which you can apply for in only a few minutes. The lending process is easy, and your options will be determined by your credit scores, credit history, income, and ability to repay. If you have good or excellent credit, finding a competitive loan should be easy to do online.
How To Be Safe When Applying for Mobile Loans on Your Smartphone?
Online security is a major concern when it comes to financial products that involve such crucial personal information. The good news is that you can take steps to protect yourself; here are a few tips on safeguarding yourself when applying for mobile loans.
Do Some Research on Similar Loans to the Ones Your Are Inquiring For
Before applying for a loan, knowing the process and the average interest rates the loan type comes with is imperative. This knowledge can help you gauge whether a lender is fair and spot red flags with loans when they seem too good to be true.
Know Your State’s Lending Laws and Basic Federal Laws
Like any other industry, with lending, there may be some illegitimate sites and apps out there looking to scam people. To protect yourself, know some of the basic lending laws in your state, and stay away from any lenders who do not follow those laws/regulations.
Do Some Research on the Lender
It is vital to do extensive research on a lender before applying. Check out past customers’ reviews and search for any consumer complaints. Lastly, you should verify how your information is shared or used—especially if you apply to a referral service that often works with a lender network.
Take Precautions When Giving Out Personal Information Online
When filling out information online, it is crucial to use a secure internet source. Avoid all public wi-fi networks and public hotspots, only work with sites with encrypted servers. If you are applying through a computer, make sure it is a personal device; never use a public computer to apply for a loan.
It will be helpful to know about the different security measures available for websites and apps, and only use them if security measures are in place. Simple things like encrypted servers and downloading apps from your official app stores are a good start.
Update Your Operating Systems Regularly
Whether your phone operates on iOS or Android, it is extremely important to make sure that you keep it updated as regularly as possible. Those update notifications on your phone or computer can be annoying, but they are there for a reason! These updates often include security patches that can help protect your personal information when you go online.
The Bottom Line With a Mobile Loan
If you are comfortable using your phone or computer and don’t mind skipping a face-to-face interaction, a mobile loan can be a convenient way to get through the entire loan process in just a few minutes. Although there are many loans that you can apply for online, there are some loan options like a mortgage loan that you must go to a lender to complete. If you decide to download a lender’s app or apply through their website, it is important to consider online security.