Online loans are convenient, easy ways to quickly get the money you need. Many online lenders will give you a decision within a few minutes and deposit money into your account within a couple of business days. Many people consider online loans for significant expenses and enjoy the benefits of flexible spending and repayment options. 

Like with any significant financial decision, it’s best to take your time and research available options. Before you submit your application for an online loan, ask yourself these essential questions and ensure the loan and financial institution are a good fit for you. 

1. How Much Do I Need?

Do you want to consolidate debt? Have a big home improvement project? Go over your numbers and finalize precisely how much money you will need. Remember that the amount you take out directly impacts your monthly payments, so you don’t want to take out any more than what you need. 

Another thing to consider is the purpose of the loan. Do you need a loan for an expensive purchase, or do you have a few hundred-dollar medical bills? If you’re using a loan to pay off something worth less than a thousand dollars, you may want to look into other options like a credit card to save yourself interest payments. 

2. What Can I Afford?

The best way to figure out what you can afford is to go over your monthly budget. Add up all your expenses (food, bills, etc.) and deduct them from your total monthly income. Judging by what you have left, decide what would be a comfortable monthly loan payment. 


The last thing you want to do is put yourself in a financial bind if you take out more than what you can comfortably afford every month. If the payment is going to take away from your rent, food, or other expenses, it’s best to lower the loan amount or find other financing options with better terms. 

3. How Long Do I Have to Repay?

The length of the loan piggybacks off what you can afford. If the lender only allows a repayment length of six months, you might pay less interest, but your monthly payments will be much higher. On the other hand, if the length is 60 months, you will have smaller payments, but you will pay more in interest over time. 

The loan length will also factor into how long you will have to include this payment in your monthly budget. If you’re planning a large family vacation within the next six months, but you won’t pay off your loan for 12 months, this may leave less money than you budgeted. 

4. What Is the Interest Rate?

As of 2022, personal loan interest rates range between 3.49% and 35.99%. Interest rates will significantly impact your total repayment amount depending on several factors, such as your payment history, credit score, and debt to income ratio. 

If you take out a $30,000 loan with an interest rate of 5% and a loan length of two years, you will pay $1,587 in interest. A loan of the same amount but with 8% interest and a loan length of 5 years will give you an interest payment of $6,498. When you increase the term and rate, the difference in amounts is significant (almost five thousand dollars). 

5. Are There Additional Fees?

Depending on the financial lender you go with and the size and type of the loan, you may be subject to fees. Some fees can affect your monthly payment, closing costs, and upfront money before you can borrow. 

Additional charges include application fees, origination fees, prepayment penalties, late payment fees, returned check fees, and payment protection insurance. Not all lenders will charge these fees; you will need to check with the institution for a breakdown of the charges you can expect to pay. However, most lenders will charge $25 to $50 for late payments and $20 to $50 for a returned check. 

6. Does an Online Loan Affect My Credit?

Online loans will show up on your credit report, not just after you open the account but when you apply for consideration. Make sure you know how the lender will check your credit before applying for the loan. Some lenders will do a soft pull, while others can only approve you with a hard inquiry, which can drop your credit score up to five and ten points. 

Opening a new loan on your credit can decrease your debt-to-income ratio, making it harder to receive financing for other things in the future. If you make even one late payment on a personal loan, it may be harder to get approved for a mortgage or auto financing. You should consider all other alternatives before going into debt.

7. What Other Ways Can I Borrow Money?

While online loans can seem like a fast and easy solution to solving financial problems, it’s not the only option. If you can’t find a decent interest rate for a personal loan, try shopping around for no interest or low-interest credit cards. Low-interest credit cards are great for smaller purchases if you know you will be repaying the money soon. 

If you have built equity into your home, you could take a line of credit or a loan against your home. Another option would be to borrow against your retirement plan. With a 401(k) loan, you wouldn’t have to worry about having perfect credit or paying back interest. You should use this loan as a last option as it is not advisable to take away money from your retirement savings. 

Before You Go

Additional things to consider when applying for an online loan include borrowing from a qualified lender, whether you need a co-signer or joint loan, improving a bad credit score, and what documentation you will need to get approved. 

Get the money you need quickly and conveniently, but only after you have asked yourself these essential questions.



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-ViviaFi is not a lender in all states. ViviaFi uses various credit reports, data sources, and application information as part of their underwriting. Not all applications are approved. Approval and loan terms vary based on applicant qualifications and by state. Decision may take longer if additional verification or documents are required.

†Applications approved before 1:30 p.m. CT Monday-Friday are generally funded same business day, subject to your bank's processing times. Applications approved other times are generally funded the next business day. Some applications may require additional verification. In such cases, if approved, funds will be disbursed by the following business day after the additional verifications are complete.