April 20, 2024 by Catra Ditya Ramawirawan

Online loans, commonly known as "pinjol or pinjaman online," have garnered a bad reputation among netizens. How could they not? Every time there is news about online loans, it often contains negative content, such as about the frightening or harsh debt collectors, or about someone who loses assets or commits suicide because they cannot pay their online loan bills. In reality, online loans were created to help people.

Indeed, there are some online loan companies that engage in deceptive practices. However, many online loan companies operate according to ethics and applicable regulations. Through this article, the writer will help you sort through and choose an official online loan that is safe.

Definition of Online Loans

Before diving into the main discussion, let's first define "pinjol" or online loans. According to Katadata, "pinjol" is a money lending and borrowing facility provided by companies operating in the financial industry online. Meanwhile, according to Peraturan Otoritas Jasa Keuangan Nomor 77/POJK.01/2016, Otoritas Jasa Keuangan (OJK) describes it as "money lending and borrowing services based on information technology."

Advantages and Disadvantages of Online Loans

Thanks to the convenience offered, low interest rates, and of course the rampant marketing carried out, online loans have become a popular financial solution. Need a new phone, use pinjol. Want to hang out with friends, use paylater, need a motorcycle down payment, download a new online loan app.

However, like any other financial service, online loans also have their advantages and disadvantages. Let's discuss them one by one.

Advantages of Online Loans

• Easy and Fast Access

The main advantage of online loans is their ease of access. As long as you have internet access, you can apply for a loan from anywhere and at any time. The fast and minimal bureaucracy process makes online loans very appealing to those in need of emergency funds.

• Fast Verification and Fund Disbursement Process

Online loan services usually offer a quick verification process. If the information you provide is complete and valid, the verification to fund disbursement process can be done in a matter of hours, a feature that is difficult to match by conventional loans.

• Relatively Light Requirements

Unlike bank loans that require many documents and collateral, online loans offer ease in terms of requirements. Borrowers only need to fill out an application form and upload some identification documents.

Disadvantages of Online Loans

• High Interest and Fees

The interest and administrative fees for online loans tend to be higher compared to conventional loans. This is because online loans have a higher risk for the lender. If you do not calculate and plan your finances well, this high interest can backfire on your financial situation.

• Data Security Risks

Applying for an online loan means you have to provide personal data to the lender. There is a data security risk that could be exploited if the online loan company does not have a good security system.

• Regulation Issues

Some online loan providers may not yet be registered or supervised by the Financial Services Authority (OJK). This puts borrowers at risk of unfair lending practices or even fraud.

Tips for Choosing an Official Online Loan

• Check the Legality of the Online Loan

Before applying for a loan, make sure the fintech company offering the online loan has an operational license from the Financial Services Authority (OJK). Institutions that are registered and supervised by the OJK are usually more trustworthy. You can check their legality on the official OJK website.

• Look at the Reputation and Reviews

In addition to ensuring its legality, it is also important to look at the reputation of the online loan company. Read reviews and testimonials from previous users. These reviews can give a real picture of the quality of products and services provided by the company. Plus, you can also see user experiences and use them as part of your consideration.

• Read the Terms Carefully

Before agreeing to a loan, read and understand all the terms provided, including interest, administrative fees, late penalties, and other terms. Don't just see the jargon "low-interest loan" and then hastily apply for a loan. Make sure you can meet these terms before making a decision.

• Avoid Loans with High Interest

One characteristic of illegal pinjol is offering loans with very high interest. Reasonable loan interest rates are usually not much different from conventional bank loan rates. Avoid loans with unreasonable interest rates as they can plunge you into bigger financial problems.

• Choose Online Loans with Reliable Customer Service

It is very important to choose an online loan app that offers responsive and accessible customer service. This shows the level of professionalism and the company's commitment to customer satisfaction. Good customer service can provide quick and effective help for any questions or problems you may encounter during the loan process.

• Use Pinjol for Needs, Not Lifestyle

Use online loans to meet urgent needs, such as medical expenses or education, not to fulfill a lifestyle. Because the latter has no end. Borrowing money for consumptive needs can cause financial problems later on.

Choosing a safe and official online loan is not easy. However, with the tips shared, the writer hopes you can make wiser decisions. Always remember to use online loans responsibly and for truly important needs. The practicality and ease of access offered by online loans are indeed tempting, but do not let this ease become a trap that threatens financial stability in the future.

If you need a loan that is proven safe, legal, and meets your needs, you can try the loan facility from Bank Neo Commerce, namely Neo Pinjam. This feature offers loans with a fast process, uncomplicated requirements, and reliable customer service support.

Try Neo Pinjam now!