When we are looking to borrow money or get a loan from some sort of financial institution, narrowing it down to one option over the other can be a challenge that few of us want to deal with. It is already a difficult process without having to sort through all of the information that is out there in regard to the various types that we can have. So, that is a part of why I am writing this guide today.
For a long time, I had never even heard of SMS loans. When I started to do my digging into them, though, I discovered a lot of helpful information. If you have been considering borrowing money internationally in particular, this blog post might be helpful for you. Do be sure to continue reading to find out more about how they work and why they might be right for you!
Table of Contents
First Thing’s First: What Are They?
Obviously, this is going to be the place to start. In essence, they are a short-term loan that borrowers are able to receive via text messages – hence the moniker of “SMS.” If you are unfamiliar with the term, it stands for short message service. Let us delve a bit deeper into what this really means from the borrower point of view, though.
When you decide to apply for one, you do it over text messages. Any communication with the lender also occurs via mobile phones, so in some ways it is rather convenient. Of course, those who prefer face to face conversations may not enjoy this aspect of them, but for people in a hurry or on the go all the time, it can be a perk.
Something to keep in mind is that these are usually classified as “micro” loans, meaning that the amount of money that is disbursed is quite small. Do not be expected thousands of dollars this way. For smaller amounts, though, it is a method that many companies are giving a try.
Is There A Reason To Choose Them Over Traditional Loans?
This is where most people start to have questions. Is there really a reason to go with this option over the other ones? Well, there are a few ways that I can answer this question, so let us get to it.
In general, if you are someone who prefers things to be fast and does not care about face-to-face interactions, you will probably enjoy this style of borrowing money. For those of you out there who are still skeptical, though, I completely understand. You could look at pages like this one, billigeforbrukslån.no/sms-lån, to get some examples of how it works in a country such as Norway.
That being said, I am more than happy to go over it as well. Personally, my main hang up before I was convinced was that I did not trust that my text messages would be read and responded to in a timely manner. Sometimes, friends and family members do not answer me – let alone strangers that I am trying to communicate with.
To my surprise, though, the operators and employees on the other side of the screen are quite quick to answer any questions and to help out. I find that this platform actually tends to speed up customer service, since I do not have to sit on hold for hours at a time. That is always such an annoying part of dealing with financial institutions.
Another aspect of this is pure preference. For many of us out there, there are few things that we hate more than having to sit on the phone for hours at a time dealing with paperwork for loans. To say it is not fun is an understatement.
Texting is far more convenient and simpler, and it is hard to argue to the contrary. Additionally, if something does come up and you have to cut the conversation short, you can always pick up right where you left off. You cannot really do that via a phone call, unfortunately.
These were popularized in developing nations, but they have started to spread to other parts of the world as well. I think it would be a shame to write them off because of where they were created, especially since they have helped a lot of people in that part of the world. Micro loans are a movement that have grown a lot lately, and for good reasons.
That is part of why there are so many articles written on the topic, like this one. Feel free to check them out – I know that I like to read a few different testimonies before I decide on one option for certain. I just think that they are a fascinating concept, especially when we start to get more in depth about what they can do for people.
What else can SMS loans bring to the table, though? Sure, I have made a pretty good case for them so far, but I think most of us would need a little bit more of a nudge before we decide to take the plunge. The same could certainly have been said for me a few weeks ago.
Keep in mind that I am definitely not advocating for people to borrow money irresponsibility. If you cannot afford to pay back the loan, you probably should not take one out in the first place. That is a huge part of budgeting and maintaining a healthy financial lifestyle, so definitely do not forget that as I proceed.
Part of what makes these so appealing to so many is the fact that they can be automated. Rather than having to deal with a lot of paperwork and bureaucracy, you can just do it over your instant messaging program. This of course also tends to speed things up, which can be quite useful if you are really strapped for cash and need it as soon as possible.
For many of the applications for a SMS loan, you do not need to have a credit check performed. That is obviously another factor in what has popularized them, especially in developing nations. However, for those of us saddled with a lot of debts, it is still rather appealing. Credit scores can be a huge factor that prevents people from improving their current lot in life.
Final Thoughts: Are They Worth It?
I can only answer this with a “yes” to some extent, but that is my overarching answer. Obviously, though, it will depend on your own circumstances. As I touched upon above, you should not be borrowing money unless you are confident that you can pay it back (plus any interest that will accrue).
Short term loans can be difficult to pay back sometimes, since the turn around is so quick. However, if that is not daunting to you, I would say there is little reason not to consider this type of option if you are already looking to borrow money from an accredited lender. Finding ways to make it simpler and more convenient is icing on the cake at that point, right? So, next time that you are thinking about this, you might want to give it a try!