When it comes to understanding how online lending has grown from 2010 to 2014, it is much easier to understand if you simply look at the way that people are accustomed to living their lives and doing business. The reason that it has grown so popular is largely because virtually everything that centers around the Internet has gained so much popularity that many people live a huge chunk of their lives entirely online. After all, it is essentially how people communicate, how they network and now, how they do business. From 2010 to 2014, the percentage has grown from 16% to 29.4% for consumers applying directly online for a new loan, versus going into a bank or lender in person and this percentage is only likely to grow higher each year.
Online lending used to be considered to be somewhat taboo. The idea was that the only people that participated in online lending were individuals who are out to scam innocent victims who were unable to get loans through any other means. However, that has changed a great deal over the last several years. Today, businesses that do not offer the opportunity for online lending are running the risk of cutting their business by more than half because many people that live in today’s information age will simply not deal with an institution that forces them to travel to the location and fill out an application in the traditional fashion. Instead, they would rather do everything from the comfort of their own home and if they cannot, they will typically move on to the next institution that allows them to do exactly that.
In fact, according to the credit union journal, this change in the lending trend has occurred because people that grew up in the digital age want to get their loans the same way that they get everything else and that means that they have to get them online. Furthermore, the Credit Union Journal points out that this has changed the way that lending institutions do business because it has essentially forced them to begin providing the opportunity for loan applications to be completed from beginning to end entirely online (cujournal.com).
What does all this really mean for the consumer? It means that people have a greater degree of access to more lending institutions than they have ever had before. It also means that people can apply in a matter of minutes where it used to take the better part of the day to travel to the location and fill out all of the paperwork. In addition, people are no longer forced to sit around in the office and wait for somebody to let them know whether or not they have been approved for the loan. Instead, they provide their information online and then they go on about living their lives until they receive an e-mail or a telephone call confirming or denying the loan application.
It also means something much more significant. It means that people that have virtually no credit history or those that have had credit problems in the past have greater opportunities to get loans that they need without being forced to spend a fortune on exorbitant interest rates and additional fees because they have a greater opportunity to select from more reliable institutions of lending. In addition, it means that these lending institutions are remaining competitive and have an opportunity to stay in business. It is a winning situation for both sides and it only serves to help individuals and families while simultaneously keeping the economy running and being good for big business at the same time.
Credit union Journal