19 Apr 3 Reasons Why Online Loans Aren’t Going Away
3 Reasons Why Online Loans Aren’t Going Away
As technology continues to innovate across the board, we realize that financial services are no exception. Over the past decade we have seen a major shift in how payments are processed, banking is managed, and installment loans borrowed. These trends aren’t likely to go away, especially when it comes to online loans.
For some people, an installment loan such as a mortgage, auto loan, or personal loan of any kind is a scheduled or planned out expense. They knew they were going to need to borrow money and shopped around before taking it out. The internet has provided a powerful tool for these consumers to help in that shopping and initial application process.
For other consumers, and installment loan is something that may be needed at more of a moments notice to make ends meet, get a new vehicle for transportation, or to help out with rent that month. While technology has benefited all consumers, it has helped this group tremendously. In addition to shopping for a loan, most online installment loan companies will allow you to be aware of your approval status in minutes and also get your money in as little as 24 hours. This compared to your standard process of walking into your bank, talking with someone, applying, and then waiting a few days to get your status as well as other requirements to get the loan.
That being said, there are a few specific reasons as to why we don’t see this process going away anytime soon. In fact we only see it getting better as time goes on.
1. Anytime & Anywhere
Mobile technology specifically has been an area the general public has come to prefer even over desktop usage as of late. People like to be able to manage everything from their smartphones and get things done “right now”. Online lenders have adapted to this and are now able to manage the process.
Consumers love the fact that if they encounter a need to borrow money in their everyday life, they can simply get on their phone and get a response from a lender in minutes. The convenience and piece of mind this provides to consumers looking to make ends meet is of huge importance.
2. Faster Processing
As we have already touched on little bit in the point above. The process for most online loan companies is fairly quick. They understand that their is competition out there and consumers are going to borrow from the company that can get them the money the fastest. Being able to make an approval decision for a consumer allows the company to fund the loan faster.
It is important to note here that speed my often come with the trade off of price. Many online lenders are offering guaranteed installment loans for even bad credit customers. Be mindful of what this means for you.
3. Cheaper Operating Costs
We’ve talked a lot about the benefits to the consumer thus far and that is justified as there are many. However, there are benefits to the lending institution as well. The competition for the best and/or fastest loan programs online as allowed these companies to innovate and reduce their operating costs. The cost to a bank when someone applies for a loan is much higher due to their inefficient process of underwriting and funding loans. The biggest often being the cost of the staff that touches each loan a there may be several individuals by the end of the process.
Most online installment loan companies have developed fully automated processes for underwriting their loan applicants. Outside of initial investment, the ongoing costs is pennies on the dollar compared to your traditional bank. That being said, there aren’t many reasons for them to change back to the old way of doing things.
A WIN FOR CONSUMERS
All in all, consumers tend to win when it comes to innovation in this space. Different type of lending options and quick funding times have made online loans very attractive to consumers. Auto and mortgage loan companies are starting to come into the fold now, with more options available where the process can be managed entirely online.
There is always room for improvement. We are curious to see what innovations will come out next in the lending space.
If you found this article because you are looking for an online loan, please consider Credit Fair-E. Credit Fair-E is an online lender that provides an ethical loan structure to help you meet the obligations in your life.