Borrowing money is an age-old tradition nearly as old as time itself, but the process has undergone a modern facelift. While many people still go through the doors of their chosen financial institution, many others open their laptops to research and apply for loans online.
Why would you want to make the switch? Beyond the convenience of applying from your home computer, there are other big advantages to using online loans. Here are some reasons why online loans are gaining traction in the financial world.
Accessibility
Gone are the days when you needed to make an appointment for an in-person interview to discuss your options. Online loans have a convenient digital platform that allows you to request, receive, and repay your funds over the Internet.
As long as you have access to the Internet, you’ll find it easy to apply at your own pace. There’s no financial advisor breathing down your neck, pressuring you to make a hasty decision without checking your budget. You can move slowly through your application and contract to ensure it’s the best fit for your needs.
If you find a match, you can apply at any time that’s convenient for you. Online loan applications don’t have an opening or closing time like bank branches, so they’re available 24/7.
Speed
Online loan systems rely on powerful tech to automate many of the steps involved in underwriting your loan. The result is a speedier experience.
Take, for example, an online lender like MoneyKey has an application that takes a few minutes to finish. Once you sign a loan contract, you may receive an online loan from MoneyKey as soon as the next business day.
Compare this to applying in-person. Moving beyond the hassle of setting up an interview with a financial advisor, it could take days or weeks to hear if you qualify and several more before receiving your funds. This unhurried timeline clashes with an emergency that requires you to act fast.
Customer Service
Automating key steps in the lending process frees up case managers to focus on more important, high-touch tasks involved with customer service. This means you’ll still have a human point of contact at every stage of the borrowing experience.
You can ask them any questions about their loans or services before you sign an agreement. If you’re approved, they’ll continue to be available throughout the lifetime of your loan.
Data-Driven Qualification
In-person borrowing options tend to put credit scores on a pedestal. Approval then hinges on having prime credit, which leaves millions of people with low or thin credit out of luck.
Online loan lenders may still look at your credit score, but it isn’t the only thing that they use to assess your creditworthiness. They move from using this specific data point to include other factors, including your income, employment history, and payment schedule.
By broadening their qualifying data, online lenders offer products that may be available to people with bad credit.
None of these advantages suggest borrowing in-person will ever go out of fashion. Still, it shines a spotlight on the gaps in services provided by brick-and-mortar financial institutions. Online loans fill these gaps with the smooth, automated tech supported by high-touch customer service to provide a new and convenient experience.