Why is Online Lending Popular?
You don’t need to go to the bank to get a loan. Today, you can secure the funds you need online. With more banks jumping online and more startups joining the fintech craze, you have more options than ever before.
But why is it so popular? We explore the reasons below.
Online Lending is Convenient
If you could secure a loan from the comfort of your home or go into a bank and meet with a loan officer, what would you choose?
The convenience of online lending is hard to beat. You can apply for the loan when you want, and provide the necessary documents electronically. You may never have to leave your home and you’ll get the funding you need fast.
Online Lending is Fast
Because online lenders communicate electronically and they don’t have to wait for appointments or even to call you, they get the processing done faster. Many online banks only do online loans, so they don’t have a backlog of loans from their brick-and-mortar side too, making it easier to move faster.
Some loans, like personal loans, even fund within 24 hours of application. If you need funds fast, inquire about a lender’s funding time.
You May Spend Less
Online lenders have less overhead than brick-and-mortar lenders. They usually pass the savings along to the borrowers. You may secure lower interest rates or pay fewer closing fees. Brick-and-mortar lenders have to cover their larger costs, which means charging borrowers more so they can stay in business.
You can Shop Around
Anytime you secure new funding, you should get quotes from at least three lenders. When you’re shopping in person, it’s a lot harder to do. Today you have to make appointments with banks to come in and see a banker. That delays the process. Plus, you need the time to drive around and meet with different bankers.
When you shop online, you can comparison shop in a matter of minutes. You provide a little information and most lenders provide an instant pre-approval or at least a quote.
Many Online Lenders Consider more than Credit Scores
If you don’t have perfect credit but have other qualifying factors, you may find more leniency with online lenders. Some lenders look at your employment history or educational background to make a lending decision. Others look at your bank transactions (if you bank with them).
In other words, online lenders have more leniency and allow other compensating factors to make up for your less-than-perfect credit.
Online Lending Provides Many Benefits
Online lending is becoming the way of the future. It’s easy, flexible, faster, and cheaper. Even if you don’t bank online yet, consider applying for your next loan online. You’ll be pleasantly surprised at how fast the process goes and how much money you save.
Make sure you comparison shop, especially since it’s easy to check with different lenders about your loan option. If you apply to different lenders within 30 days, you only hit your credit report with one inquiry but get access to multiple quotes.