Fintech, shortened for financial technology, is a new trend that’s gaining momentum in the lending industry. It aims to improve and automate the utilization and distribution of financial services.
In the lending industry, fintech lenders are also called online lenders. This new lending trend is the industry’s future, and that’s why you should understand how it affects you as a consumer who acquires various loan products.
Below are the most common impacts that loan consumers have experienced since fintech started to dominate the financial scene.
Helps Consumers Easily Apply for a Loan
The most notable impact that fintech brought to consumers’ lives is the easy loan application. With fintech lending, your chances of being approved for a loan will increase compared to applying to a traditional lender.
It’s also one of the reasons why fintech is becoming more popular in the personal loans field. Fintech lenders have more relaxed eligibility criteria and easy application processes. If you have been turned down by many traditional lenders before, you should try your luck with a fintech lender instead.
Additionally, since fintech lending can be accessed online, you can just apply for a loan using your computer or mobile device. Most online lenders have websites and mobile apps that you can download easily. You can quickly acquire fast cash with apps like Possible Finance if you download them and start acquiring loans through their platform.
Bad Credit Consumers Get a Chance to Acquire a Loan
Before, fintech dominated the lending industry, where banks and traditional lenders were the only loan options available. Consumers with bad credit scores weren’t eligible to acquire a loan. It’s very challenging, especially for consumers who haven’t built their credit score yet.
When fintech was born, it created a way to help individuals with poor credit scores acquire funding during emergencies. Most online lenders offer a loan option to their consumers with bad credit scores.
However, you must know that this loan offer could have a higher interest rate or will need collateral or a co-signer. Online lenders create these additional requirements to protect themselves in case of default.
When you fulfill the online lender’s initial and additional requirements in acquiring a bad credit loan, you will likely get approved for a loan and the cash immediately.
Provides Better Accessibility
Fintech lenders open doors of opportunity for underserved markets like those who live in areas that have minimal access to traditional lenders. Underserved communities can now easily apply for a loan online with the help of fintech lenders.
They only need a mobile or computer device and an internet connection to access various lenders offering different loan products that might suit their needs. They don’t need to visit the nearest city or capital to apply for a loan. As a result, consumers can save money, time, and effort.
Consumers Experience Better Services
Online lenders have 24/7 operations, including their customer service. It means that you can apply, get funded, and troubleshoot issues any time of the day.
The most active consumers of the lending industry today are the working sector. That means they’re a busy generation. With fintech, these consumers can apply for a loan even after office hours when banks and traditional lenders have closed already.
Fintech lenders understand there is no right or wrong time to need extra cash. Therefore, they ensure their services are continuously operational throughout the day, even on weekends.
And whenever you have an issue regarding their services, you can quickly contact their customer services which are also responsive at any time of the day. Access to their customer service operator is readily available on their websites and apps, which makes it easier for you.
Consumers Now Have a Go-to Lender
As loans are readily available online thanks to fintech, consumers now have a lender they can count on whenever they need additional cash. It doesn’t only benefit consumers as it is also beneficial to lenders.
Consumers are becoming more loyal to their loan providers due to the improved experience and fast transactions offered by online lenders. Before, it was hard for lenders to get loyalty from their consumers.
It’s due to some inevitable mistakes that traditional lenders are prone to make, like overlooking your application, especially if so many borrowers are applying for a loan. They might also forget to include a requirement that you need to comply with later on in the application process, which could delay the approval of your loan.
But because fintech makes the process automated, you can ensure that you’ll get a good service with fewer mistakes on the lender’s part. Conversely, it cuts costs, time, and effort in processing loan applications as a lender.
Fintech indeed created a significant impact on loan consumers, and these impacts are primarily positive and beneficial. That’s why it’s unsurprising that fintech lending is gaining momentum nowadays. If you plan to acquire a loan, considering an online lender might benefit you.