Are Online Loans a Good Choice for Sri Lankan Professionals?
Urgencies don’t come with prior notice, especially when it comes to the money side of things. One of the easiest and quickest ways most people prefer including professionals in Sri Lanka is online loans. However, do you want to know the pros and cons of online loans in Sri Lanka as a professional? Are online loans a good choice to overcome your temporary money requirements? Let’s have a look at this important topic.
What is an Online Loan?
In this article, we do not consider the online loans that are provided by banks in Sri Lanka. Instead, we are discussing financial institutes that grant micro-credit facilities for a very short period of time with little to no documentation and even guarantors.
Usually, these companies require only a valid identity card, a mobile phone, and a maximum of two guarantors to facilitate a loan for people who have an income source. The best part of the story is that it takes no more than a couple of hours to apply for the loan, get the approval, and receive the amount credited to your savings account. This is one main reason why most people in Sri Lanka, including professionals choose these online loans.
More often than not, these companies work as a chain, which means if you get your loan application approved from one institute, you will likely get approval from others as well and vice versa.
Common Eligibility Criteria for an Online Loan
As we slightly touched on earlier, the eligibility criteria are quite straightforward and it is way different from the process you would go through when you apply for a personal loan from a reputed bank in the country.
Here are some eligibility parameters that are commonly used by these companies.
- National Identity Card or Driving License
- A mobile phone with an active connection
- One or a couple of guarantors (they may call the guarantors to verify the details you provide)
- A selfie
- Address verification document (not common)
- Salary slips (not common)
- A contact of the employer
Pros and Cons of Online Loans for Sri Lankan Professionals
Here comes the most valuable part of this article. If you are planning to obtain an online loan for whatever reason, we highly recommend reading this section vigilantly to make an informed decision.
Pros of Online Loans for Sri Lankan Professionals
- You can obtain a loan even if you have a bad credit history (CRIB).
- Most of the time, the loan application tends to get approved quickly if you are a salaried employee.
- The loan gets approved within a maximum of a couple of hours.
- The first loan amount could be higher if you are working at a reputed company with a considerable amount of salary.
- Ability to extend the repayment date.
- Upon a successful settlement, you are entitled to another loan with an increased amount.
Cons of Online Loans for Sri Lankan Professionals
- The interest rate is significantly higher compared to the bank loans.
- The first loan amount is typically less than 10,000LKR.
- The loan has to be settled within one or two weeks time.
- If unsettled at the agreed time frame, the penalty charges can be pretty high.
- The company may call your guarantors or employer if you fail to repay the amount with the interest on the agreed date.
- You won’t be able to obtain an online loan in the future from similar companies if you fail to repay according to the guidelines of your existing loan.
Are Online Loans a Good Choice for Sri Lankan Professionals?
Apart from the above drawbacks, our research on the web revealed that some of the companies in history have used some unethical approaches to collect the due amount from their customers. Although we are not naming the names of the companies, it is your duty to weigh down the pros and cons very carefully before obtaining a loan from these institutes.
The main two points you must keep in mind are, the interest rate is significantly high in these schemes and the time you get to repay the loan is very short.
So, before applying for an online cash loan, think about whether you have the ability to repay the loan on time and the consequences you would face if you failed to settle on time. As far as we are concerned, we would like you to consider alternative methods, if available, to minimize the potential future hassle caused by online loans.
If you are desperate for money right now, as a salaried professional, here are some alternative methods we suggest instead of obtaining an online loan.
- Request for a salary advance from your employer.
- Reach a friend or a family member, explain your financial Predicament.
- If time permits, reach out to the bank to which you receive your salary and request an urgent loan.
- Declutter your home and sell unused or valuable items like electronics, furniture, or jewelry to generate quick cash. ikman.lk is one online marketplace you can consider for this.
- If you own a credit card, explore whether you can manage the expense through credit while ensuring timely repayment to avoid high interest.
Verdict
We hope now you have a clear idea about whether a quick online loan is worth it as a professional in Sri Lanka to manage your urgencies. Yes, they are pretty fast to obtain unlike most other loans in the country, but as we explained there are certain important drawbacks to these loans that you should pay attention to.
If you need more input from us, let us know in the comment section. Have a great day!
