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Are 1 Hour Online Loans A Hoax?

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By Author: Novlik Nisudan
Total Articles: 4
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Online loans are becoming the preferred choice in borrowing and there is little doubt that this is a temporary trend. The market is in a surge and the numbers indicate a robust future to the service providers and borrowers alike. The lenders benefit with lowers costs of transactions and improved data management while the borrowers benefit with shorter turn-around-time, greater competition and easier regulation given that what’s online is right out there for everyone to view including the authorities.

Yet, there is a lot of noise in the market about the trending 1 hour online loans.
While useful as a concept, the vast majority would know that a typical loan would not take just an hour to credit with the current rules, regulations and safety requirements. This is one reason why some people find it to be a less legitimate claim. Nonetheless, the lenders continue to offer this as their fastest service for loan disbursals and it can stand to have valid merits for some borrowers. An example of a lender with a fair reputation is CashAmericaToday and here is the link for their 1 hour online loan.

The other reason is that being non-bank direct lenders, some might have illegitimate services altogether. This is when a hoax can get really serious. But, we shall cover the ways in which one can stay safe from illegitimate online lenders and know for sure that the loan they’re looking at, is genuine. But first, we shall dig deeper into understanding the one hour online loans, to be able to know exactly how they work and what the “one hour” claim really means.

How is it Different from a Pre-Approved Loan?
We know that some credit card holders get offers of instant loans which are at times disbursed immediately when applied for. Then there are some lending apps that give instant money in very short amounts. However, the loans being discussed here in this article are different from these pre-approved loans which have already considered what amount of a loan can be offered and are just disbursing an already approved amount of loan to the borrower.

Having the choice to take a pre-approved loan can be great but not everyone shall have this option open to them and for those whom this is an option, the limit of the amount can vary drastically depending on their assessed financial and credit health.

However, the non-bank direct lender loans are available to almost all adult permanent residents and some even serve people with poor credit history.

How long is it Actually Taking?
Having done a study and gained inputs from borrowers, it is safe to say that direct lender loans that are labelled as “1 hour loans” or so, are just fast versions of their usual loans – mostly payday loans or other such short term personal loan products.

A deeper look at the transparently written offers, tends to reveal that a major part of their processes are aimed to be completed within an hour. For example, some lenders promise a decision within one hour of application when the loan is applied for during their business hours, while some lenders promise credit within one hour of approval of the loan.

Logically, this seems like a manageable task but any hurried process can be subject to limitations and for a borrower, it’s good to be aware of them.

While there has not been enough study done to understand what the actual average turn-around-time for such loans truly is, what one can say after reading loads of reviews and talking to past borrowers is that few of the most reputable direct lending companies manage to credit loan amounts in 3-5 working hours from when the application was submitted.

Would a True One Hour Loan be Riskier?
Practically speaking, it takes time to adequately assess the ability of a borrower to repay any loan. An understanding of credit health and financial health is essential to gauge this. However, the market has grown to accommodate compromises on this, for short and very short term loans. Direct lending from non-bank lenders has enabled this and millions of people each year do depend on it.

The typical methods used for assessing credit and financial health are also not flawless as such, but efforts are continuously being made by several entities, to make it as fool-proof as possible.

That said, non-bank direct lenders that offer the one hour loans, are bound to avoid certain steps in order to come close to fulfil their promises and keep the borrowers happy. While many processes keep getting faster as internet and computing power increases, it is still not currently possible to make such loans as safe as traditional loans, which is why these loans are only available as short to very short term loans.
However, to mitigate one’s risk while taking a loan, it is highly advisable to first be sure that failure of repayment is highly unlikely. Failing to repay any loan can come at a great expense and also damage one’s credit score.

How to Ensure Your Online Loan is Genuine?
The state and federal government are always on the lookout for financial malpractices. Yet some caveats do exists and keep cropping up once in a while. A great advantage of online lending is that lenders have an online presence that can be browsed through easily before making a decision. Reviews and feedback from genuine customers and speak for the legitimacy of online lenders.

Apart from that, it is advisable to scan through these indicators of legitimate direct lenders:

1. Contact Details and Address: Direct lenders that are registered and accredited would reveal valid contact details on their website or in their shops
2. Deposit/Payment: Legitimate loan lenders do not ask you to pay or deposit money to get a loan or apply for one
3. Registrations and Accreditations: Look out for security certifications on the website, accreditations like BBB (Better Business Bureau) and registration details of the lender to be sure of their recognition as a legitimate lender.
4. Suspicious Offers: Some lenders or websites can claim to make offers like first month free, etc. Be informed that these are likely to be misguiding or illegitimate offers/lenders
5. Asking for irrelevant personal information or passwords: A direct lender shall need your bank details, name, address, SSN, salary slips and some other related information that seem relevant to a loan. What they do not need is a prepaid credit card number, account passwords, your bank customer ID and other information that can jeopardize your financial safety. Some scammers do pose as direct lenders to gain access touch information from people.

Should you come across an illegitimate loan lender, in the interest of other borrowers and making the market safer, it would be good to report it to the FTC (Federal Trade Commission)

Online Loan Matching Services vs Online Direct Lenders
Direct lender loans are available online in two ways – from loan matching services and from the direct lenders without any third-party involvement.
There are advantages and disadvantages to both and understanding this can impact safety and costs for a borrower.

Generally, it is advisable to use a loan matching service only when you’re unsure of finding a safe direct lender while you know a safe online loan matching service. The loan matching service is simply going to connect you to one of their trusted direct lenders and earn for that through a commission.

Keep in mind that, finding a trustworthy matching service is going to be as easy or difficult as it shall be to find a trustworthy direct lender however the latter being the lender, is likely to offer better deals due to the lack of the need to pay out commissions. Also, the transaction can be faster when your entire deal is with the lender. Check out CashAmericaToday if you’re looking for an online direct lender providing installment and payday loans with instant approvals.

That said, the existence of loan matching services exist for a good reason – they ensure competition that always leads to customer benefit in many ways.

Loans are becoming increasingly easy to get and their approval is getting progressively fast with the availability of great computing power and better communication technologies. However, if a loan is available too easily and too quickly, it is likely that it is less safe than other options. Doing homework to know which lender is safe to deal with, is important for a borrower and so is it to also know that repaying would be convenient enough.

Provided you have well assessed that your loan lender is legitimate and that the repayment on time is feasible for you, taking such a loan and understanding that the money reaching you would in reality take a few hours or at times even one whole business day post application, you should be safe choosing to take such a loan.

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