Are you in an unexpected financial situation? It often happens to individuals to come across unpredicted expenses, such as scheduling an urgent medical checkup, taking their pets to the vet, having their cars repaired, traveling unexpectedly, etc.
When caught up in such situations, most people have no better alternative than borrow money to cover the expenses. Fortunately, they are provided with the chance to apply for SMS loans, which involve an automated application process. The funds get transferred to the borrowers’ accounts within one or two business days.
Here is everything you need to know about the procedure and benefits of getting an SMS loan.
SMS loans or mobile loans have become increasingly popular in Scandinavia, especially Norway and Finland. These microloans can be obtained by sending a message to the moneylender and waiting for approval in a short time. Such short-term loans are ideal for individuals coping with an unexpected financial situation, as the processing time is much shorter than usual. In some cases, it might take less than fifteen minutes for a lender to approve your application.
Additionally, the application process is automated, simplified, and fast. No more than three minutes are necessary for an individual to complete the online application. Most importantly, the applications of individuals for SMS loans cause no harm to their credit reports. Consequently, your credit score won’t be affected by the number of applications. Read here about credit scoring in multiple countries worldwide.
Moreover, moneylenders tend to spend an insignificant amount of time checking the financial situation of borrowers. Due to the absence of a detailed research, people with a poor credit score are also provided with a chance to get money. You don’t need a spotless score or high monthly income to qualify.
While lenders usually market SMS loans as low-interest or interest-free, the rates aren’t as low as moneylenders claim. Also, there are multiple fixed fees attached to the microloan, such as administration and processing fees. Make sure you read the fine print before signing a contract with the lender to avoid unexpected surprises.
Furthermore, your inability to pay an SMS loan off within the deadline might result in skyrocketing interest rates and additional fees. Many moneylenders charge collector agency and late fees to anyone who fails to provide payment on time. Additional fees aren’t applicable if borrowers pay their installments on a regular basis.
Benefits of SMS loans
Microlending has become an attractive alternative for many individuals because of the numerous advantages it provides to borrowers. One of the greatest advantages is getting fast loan approval, which is vital in case of emergencies. No other alternative provides borrowers with a chance to apply for a loan within minutes. The procedure is as simplified as possible, requiring just a couple of minutes for application submission.
In contrast, traditional financing requires more documentation and a longer period for a submitted application to get approved. Not everyone has the time to cope with piles of documents, only to get rejected in the end. The eligibility requirements for SMS loans are much less strict in comparison with traditional credits, which means individuals with bad scores also have a chance to get approved.
In addition, moneylenders don’t place the focus on credit history in the process of approval. On the contrary, they put an emphasis on employment and steady income. They find it important for applicants to provide proof of stable income. Go here, https://economictimes.indiatimes.com/wealth/borrow/how-to-avoid-rejection-of-personal-loan-application/articleshow/69352815.cms?from=mdr, to check out some practical tips for avoiding rejection of personal loan application.
Individuals with limited credit history and low credit scores don’t have to get discouraged, as these factors won’t hold them back from obtaining emergency cash. Such an opportunity is a dream come true for every borrower whose FICO score is far from stellar. Keep in mind that SMS loans contribute to the credit history of individuals, helping them to improve it. The same goes for their role in improving FICO scores as long as borrowers pay the money back as agreed.
Another incredible benefit of SMS loans is the quick payout. Anyone interested in getting a microloan through an SMS is highly likely to need immediate access to cash. Fortunately, these moneylenders complete payments in the shortest notice possible after receiving the application. You won’t have to wait for days for the funds to be transferred to your bank account. In most cases, you will be provided with access to the loaned funds either the same or the following business day.
Flexibility is another advantage of getting a microloan, as you will be introduced to the payment schedule and interest rates before making a commitment. If you find the schedule or rates inconvenient, no one obliges you to sign a contract. Also, the commitment that comes with short-term loans isn’t as demanding as traditional financing.
Most borrowers are provided with a timeframe of six months to complete all payments, but make sure you compare the repayment terms of multiple lenders. Nowadays, a myriad of websites offers financial advice, such as the forbrukslån.no SMS loan tips, helping borrowers get the best deals on unsecured loans. Consequently, you won’t experience the pressure of having a credit to pay off for years, which triggers a significant financial strain.
Nevertheless, it’s paramount for borrowers not to get caught up in a debt cycle by loaning money just because they are low on cash. It’s common for some people to make expensive purchases without keeping track of their finances, thus ending up with no money to pay for the necessities. Consequently, they take a short-term loan to cover these expenses.
Anyhow, if the habit of excessive spending isn’t terminated, individuals take another credit to repay the previous one, hence becoming part of a debt cycle. Unless you need cash to cover emergency expenses, don’t apply for an SMS loan for no good reason.
Alternatives to SMS loans
At some point in life, most individuals are tempted to take out a microloan. There is a multitude of unexpected expenses you can come across in daily life, such as medical emergencies, major auto repairs, home repairs, unplanned travel, unexpected gifts, etc. In such moments, many people turn to borrowing money.
There are multiple alternatives you can try instead of getting a credit, such as saving, credit cards, installments, etc. For instance, if you’re not in a hurry to make a purchase, why not save money for a certain period and avoid paying for interest and fees.
Additionally, credit cards are another option when having to make an important purchase, like buying a laptop, a washing machine, a dishwasher, etc. The interest rates of these cards are approximately the same as those on microloans.
Purchasing items in installments is yet another alternative to consider instead of taking a short-term microloan. Nevertheless, you have to compare the interest rates of both solutions to check which one is more convenient. Installment plans are infamous for their high interest rates, so be attentive when making a comparison.
There is no longer a reason to get nervous if your vehicle needs immediate repair or you have a medical emergency to pay for.
An SMS loan will cover the costs!