An online loan is a personal loan that you obtain online instead of at a physical location, like a brick-and-mortar bank or credit union. A personal loan provides a lump sum of money that you can use for almost anything, including debt consolidation and large expenses like home improvements.
Personal loans online loans vs. payday loans
If you search for online loans, you might come across payday loan lenders. These predatory loans typically come with triple-digit APRs as high as 400% and short repayment terms (usually a week or two).
Getting payday loans online may be tempting since they’re so easy to qualify for, but we suggest that you resist the urge. Once you’re in the payday loan debt cycle, it can be nearly impossible to dig yourself out — instead, target reputable lenders. APRs on reputable online personal loans are usually capped at 35.99% and have terms of up to five years (or longer).
Depending on your borrowing history, you might need to get prequalified with several lenders before you find one that’ll give you a loan. You might find success by targeting lenders that offer bad-credit loans.