Payday Loans

Digital corporate loans: how do online payday loan platforms work?


Your mailbox is full, the phone rings continuously and now an employee is also sick. Those who run a small business often find it difficult. You know that. It always burns somewhere. It is therefore important to save time and effort.

For many medium-sized companies, corporate financing is a time-consuming and nerve-wracking affair. Loan applications at the house bank are usually associated with bureaucracy, long discussions and waiting times. This is often not because of the applicant, but because of the bank’s inefficient workflow.

If you apply for a company loan from the house bank, you have to expect waiting times of 6 to 8 weeks. That is clearly too long. That is why 62 percent of all small and medium-sized enterprises (SMEs) want to get rid of their house bank, according to a survey by the Federal Factoring Association for SMEs. You should also think about it, because time is money after all .

There are now alternatives: Financial technology companies – in short: “fintechs” – have digitized and automated lending and can radically shorten processing times. Queuing was yesterday.

Despite the sometimes very good offers on online payday loan platforms, many still shy away from loan applications on the Internet. But there is actually no reason for that. That is why I would like to explain in this post how credit platforms work and what you have to consider when applying for a loan online.

How long do you have to wait for a loan offer on credit platforms?

How long do you have to wait for a loan offer on credit platforms?

You can get loans much faster on digital credit platforms than at the house bank. The fastest providers can make you an offer within a few minutes.

Others take a few days. Some providers can pay out loans within 1-2 working days. Of course it also depends on the quality of your application. If, for example, you do not submit all documents in full or if there are questions about your details, the processing time may also be delayed. So make sure that your information is complete and correct.

Why are credit platforms faster than the house bank?

A credit platform will examine your application as carefully as the house bank and the lending guidelines are comparable. There is often a bank behind the platforms. The difference to the house bank, however, is that credit platforms use digital and automated processes.

In contrast, you usually have to submit your application to your house bank in paper form. A bank employee then manually checks your data. You can submit all data and documents digitally on credit platforms. These are then automatically evaluated using a computer-controlled system. This massively shortens the processing time.

How do online providers perform in terms of loan terms?

How do online providers perform in terms of loan terms?

This cannot be answered generally, because it depends heavily on the provider. In principle, credit platforms have a cost advantage compared to traditional banks due to their digital processes.

You don’t have to maintain a branch network and employ fewer people. They can pass the lower costs on to borrowers in the form of lower interest rates.

However, this is not necessarily the case, so you should compare different offers. Most credit platforms also offer unsecured loans. So you don’t have to provide any collateral, but the interest will be a bit higher compared to secured loans.

How do I sign the contract?

How do I sign the contract?

There is the so-called video identification procedure for signing the contract. You may still be familiar with the old post-identification procedure, in which you had to identify yourself with your ID card in a post office.

The video identification process works in principle the same way, but completely online. You will be called by video call on your computer or smartphone and you must hold your ID in the camera. When the authentication is complete, you still have to confirm a mobile TAN and the contract is then legally binding.

Online payday loan applications are quick, unbureaucratic and straightforward. This can save you a lot of time and effort. Even if you don’t need the loan urgently and can take your time applying, you should still look around on the Internet. Who wants to mess with banks for weeks, after all we all have enough to do.

It is important that you only contact reputable providers. These are now abundant – with good offers. The processing times are short and the conditions are usually comparable to the house bank. Anyone who is still in line in the bank today clearly has too much time.

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