Types of online payday loans
To meet the high demand, credit products or loans are now increasingly varied. Not only loans from banks in the form of credit facilities such as unsecured loans (KTA) or multi-use loans, but there are also loans in the form of payday loans via the internet or online.
Then what are the types and parties that provide them? Basically, there are 2 types of online payday loans that are developing at this time, namely as follows:
# 1 Website Lending : Financial Technology Lending, Micro Lending
Website lending is a service provider company with an online loan for various needs in which the funds are held directly by the provider. Online payday loans can be used for all urgent needs, such as paying for education or health needs such as doctor fees and medicines.
By providing loan services, the company targets people who based on survey results still need access to micro loans to achieve a better quality of life. The loan scheme is similar to a bank loan, where the borrower directly applies for a loan from the company.
But the location of the difference is that the loan procedure can be done online without the need for direct face to face.
# 2 Peer to Peer Lending
Peer to Peer Lending is a financial concept that uses information technology assistance to provide easy money lending and borrowing services where providers only provide facilities that allow lenders and borrowers to borrow online.
Peer to Peer Lending enables funders and borrowers to make the process of lending and borrowing in the platform that are online. This system is called peer to peer because it is done by fellow lay users, and not by official institutions such as banks or cooperatives.
Peer to Peer Lending is a place to transact well if you want to borrow a number of funds to grow your business or if you want to invest by lending a number of funds and acting as investors. Peer to Peer Lending is the right system if you want a fast personal loan or for those of you who have excess funds and are still confused where you want to invest it.
What is the Difference Between Online Payday Loans and Money Loans at Banks?
Before discussing more deeply, let’s answer the most common questions first: what is the difference between online payday loans and bank loans?
The basic differences in online payday loans with loans at banks are as follows:
|No.||Characteristics||Website Lending||Peer to peer (P2P) Lending||Bank|
|1.||Submission process||Filing via online to the provider.||Registration for submissions on related platforms is displayed in the marketplace until there are interested investors.||Direct submission to the bank.|
|2.||Duration of process||Hurry up||Hurry up||Tends to be long|
|3.||Advantages and disadvantages||
+ The process is easier and faster.
+ Can be done anytime, anywhere.
– Usually there is still a contract signature process that requires face to face.
+ The process is easier and faster.
+ Can be done anytime anywhere.
+ Higher returns for investors.
– There is a time to wait until there are investors who choose your submission.
+ Safer (less risk)
– Old and more complicated process.
– Can not be done online.
However, there are still many who do not agree with the use of online loans like this because of the many risks that will haunt you. What kind of risk is meant? Immediately see the discussion below!
Online Loan Risk
Every thing must have two sides, namely the positive and negative sides. Similar to online loans. The birth of online loan products is certainly with a number of benefits or benefits, but not infrequently many online loan products are also considered to have risks.
Well, on this occasion Dulcinea will outline the risks of this online loan. Hopefully this information can be your consideration before applying for an online loan.
# 1 Flower Height
One of the weaknesses at the same time the risk of a common online loan is the relatively high loan interest rate. It can even be said to be very high. Until now, the OJK has not regulated the issue of online loan interest limits. The high interest rates are left to market players, online loan companies.
Online loan companies have their own reasons for applying such high interest. One of them, the high risk of online customers who abuse this loan, due to the ease of terms and speed of approval. Thus, always take into account your ability to pay or repay this loan along with the interest.
# 2 Small Loan Ceiling
The second risk of online loans is that the ceiling tends to be small. This is in line with the trend of loans without collateral, namely a small loan ceiling. The average ceiling is under IDR 5 million per loan.
Even some online loans start at 1 million rupiah and can only request a ceiling increase after taking out a loan several times. This is because the lending company wants to minimize the risk of the borrower’s escape, given the absence of collateral charged. In addition, it is very easy to apply for this online loan, aka less filtered.
# 3 Personal Data Saved on the Online Loan Application
In applying for an online loan, prospective borrowers must download an online loan application. The customer downloads the application on the mobile and from there proposes a loan. Of course, this method makes it easy. Whenever you need, just open an online loan application on your cellphone and can apply for credit.
However, the risk is that your personal data can be stored and accessed by online loan companies when customers apply for loans.
You as a prospective customer should understand and understand that when applying for an online loan, you have given approval for the use and access of personal data for the benefit of online credit submissions.
# 4 Old Disbursement Process
Many say that the advantage of online loans is the fast disbursement process. Unfortunately, the high expectation when applying for an online loan is that there are many reviews on the Google Play Store that complain about online loan services regarding the duration of disbursement and the absence of a response (approved or not) for online loan applications.
In fact, despite using technology, many online loan processes cannot run fast. It can take several days for a decision to be approved or not.
# 5 Risk of Failed Pay
Like all loans, if the customer fails to pay the loan online then there is certainly a risk. Generally the first stage is that there will be a collection action. Keep in mind the billing process is not only done by reminder via e -mail and SMS. Billing actions ranging from reminder to intensive nature so that customers pay their obligations.
The second action is to report you to the credit bureau that is required by OJK to each Financial Technology company. This report aims to ensure that non-paying customers cannot apply for a loan again.
So, if you really want to apply for credit at an online Financial Technology company, make sure you have the ability to repay the loan. Do not be tempted by an easy and fast process, customers do not take into account the ability to repay loans, which ultimately leads to an unpleasant collection process.
# 6 There is a Billing Administration Fee
When you fail to pay or are in arrears, the risk is not only facing billing, but also additional costs because online loan companies ask for fees for late payments. The bad news is that some online loan companies charge billing fees to delinquent customers.
The amount of this collection fee is generally quite large when compared to the loan ceiling. Therefore, prospective customers need to ask or read credit agreements carefully about liability if the customer is late in paying the loan arrears.
# 7 OJK Not Registered
One of the main risks that I think is the biggest drawback of online loans is that these types of loans are often not registered with the Financial Services Authority (OJK). According to the law and its provisions, every institution offering an online loan must register and get a license from the FSA.
Unfortunately, there are still many companies that are naughty and don’t register their companies. Therefore, we strongly recommend that you always check online loan companies before applying for a loan.
Here’s an easy way to check the companies registered with OJK:
- You can just go to the website of the Financial Services Authority (OJK) and be able to find a list of Financial Technology companies registered with the OJK. At present there are 64 f intech companies that have been registered with OJK as of June 2018.
- See if the related company is on the List of Financial Technology companies registered with the OJK.
# 8 Bodong Investment Potential
Continuing the discussion on point 7, often online loan companies ignore the registration of their companies at OJK. But it is not merely because of negligence, there are also companies that really SENGAJA do not register with the aim of committing fraud.
This deception is often referred to as the ignorant investment mode. Indiscriminate investment is of course detrimental to customers. Although ignorant investment is more aimed at those who are investors, it is important for borrowers to ensure that the place to take loans is an official company.
So, don’t forget to always check the list of investment companies registered with OJK. You can also see OJK’s list of fraudulent investments by checking the latest fraudulent investment list of the Investment Alert Task Force.
Consider Before You Regret
Now you know what types of online loans include the risks in them. Hopefully this article helps you in making your online loan decision. If so, share this article with your relatives who are also considering applying for an online loan. Thank you!
Do you have questions about other online loan risks? Leave your comment below. If you have questions, please submit your question in the column below, thank you.