If you have ever applied for a personal loan, you already know that once the financing is approved, the money is transferred to a bank account from which you can use it. However, not everyone wants this type of transaction. If you have wondered whether it is possible to have a personal loan deposited with PayPal, we will try to answer your question.
How does a personal loan deposit work?
Usually, the functioning of a personal loan works is simple:
- The user requests the amount of money he or she wants to finance.
- The lender studies the operation.
- Once the operation is approved, the financed money is deposited in a bank account or card provided by the user.
Subsequently, the repayment installments will be charged to the same account (or another account provided by the user).
Although it will carry out most operations in a conventional way, there are other different channels and situations in which alternatives are possible. One of them may be to use PayPal as a loan deposit tool, although, as we have already mentioned, this is not something that all banks or lenders are willing to accept.
How a loan on PayPal works
First, it is important to understand that many people use PayPal accounts daily, personally and professionally.
This usage makes them real money distribution centers where we can deposit money and withdraw daily. Therefore, applying for loans on PayPal makes sense for many users and some lenders.
In short, it is a loan similar to conventional loans; instead of being credited to a bank account, it will be credited to PayPal.
Therefore, the keys would be the same as if you were going to apply for a personal loan. The first of these keys is, logically, to have a good credit score and be able to apply for a loan.
It would be best if you also considered that your PayPal account is operational and accessible.
Finally, the third fundamental aspect is to select a lender that allows you to make the funded deposit into your PayPal account.
On this last point, remember that many banks and conventional lenders will not agree to deposit money with PayPal. However, even in some cases, when they say no, you can try to negotiate. Some financial service providers would rather change their position than lose a customer.
The rest of the transaction will be similar:
- Once the loan is approved, depending on the provider, they will deposit the money in your account within 48/72 hours.
- You’ll have to point a source of payment for the installments: in some cases, they won’t accept your own PayPal account, and you’ll have to provide a debit or credit card.
The loan will be neither cheaper nor more expensive. In fact, if the provider asks you for some extra commission or added expense for carrying out the operation on PayPal, you are probably facing an irregularity.
However, it would help if you kept in mind that PayPal may charge you a fee for receiving the deposit. That is an expense you would not normally incur with a conventional loan.
On the other hand, keep in mind that some lenders will limit the amount they will finance if the deposit is made with PayPal. They may offer you a higher amount financed if you deposit in a bank account than if you deposit in PayPal.
Alternatives to conventional loans
A real alternative, much friendlier to loans deposited in PayPal, is to turn to P2P. These are non-conventional loans, made directly between individuals and using Internet platforms for this purpose.
That has become a growing model that also provides benefits to both parties. This double benefit comes from the fact that the lender obtains a return as an investment, while the borrower will usually have access to lower interest rates than conventional loans.
In this case, it is quite common that can credit loans on PayPal.