4 Ways The Online Loan Services Are Outperforming The Banking System

In the last 2 decades, internet technologies such as big data, social media, mobile communication and cloud computing, have disrupted the conventional business atmosphere and reshaped how transactions are conducted today. Today, we witness how eBay, Amazon, and Alibaba are leveraging the electronic commerce platform for increased product sales. However, the electronic commerce has evolved from just trading digital goods to providing financial services and now a credit-based facility. The innovative approach to online financial services has prompted the traditional banking sectors to introduce internet banking, online transaction and card payments. All in the name of staying relevant in a fast-changing marketplace. The advancement in the traditional banking system has not deterred the growth of online financial services. In recent times, online B2C and P2P lending have begun to attract the attention of a wider audience because they offer loan to businesses and individuals without going through the traditional banking bureaucratic models. So, why is online loan services getting more popular and outperforming the traditional banking system? Kindly read further.

Interest Rate

It is understandable that online loan providers are not a charitable business which means they must make a profit to keep the business running. This brings me to the reason why they must charge interest rates on the loan they provide. However, the interest rates are an important aspect of a loan, for a borrower, there is no point leaving the traditional banks if the interest rate of an online provider is high and not fixed. Payday loans in the UK is a typical example of an online loan provider which offers £ 100 - 25000 worth of financial services without any fees and allow a flexible payback plan. Unlike traditional banking system once the interest rate is agreed on it is not reversible.

The industry is strictly regulated, and an amount of loan applications is monitored. This is to ensure that borrowers don’t misuse their personal loans. Trustworthy lenders give you all the necessary information regarding the loan you want to borrow, and the interest charged.

Accessibility

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One of the fastest ways businesses and individuals can be attracted to financial services is when their product is readily accessible. Accessibility irrespective of your past credit record or collateral and status. On the other hand, traditional banks can be selective, especially because of the recent global recession and that puts a toll on businesses or an individual. Online loan services can look pass this bottlenecks and deal with their borrowers on an individual basis. The services allow borrower have access to a variety of lenders to agree on the terms of the loan. No wonder, it is possible to receive financial services from an online loan provider even if you have a low credit score or have no credit history at all.

Time

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Unlike traditional banking system, it is quicker to get a loan approval using the online loan services. This, in turn, saves time and effort for the borrower. I guess the only thing that might make it a bit longer will be your internet speed and I bet you network provider isn’t that slow. The traditional banking system still requires their borrowers to book an appointment to visit their nearest branch. I wish it was the other way around. Online loan services provide different options for the borrowers and it can be executed from the comfort of their room.

In some cases, financial services can be urgent or even in the middle of the night. I don’t know any traditional bank that can approve a loan at 12 midnight or in 24 hours.

Convenience

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I mentioned earlier that you could apply for a loan using the online platform at the comfort of your home. Yes, you can even with a mug of coffee while still covered with your duvet. This is because all the dealing is online, and no single outing is required. Its about time the table turns, and borrowers don’t have to go through the humiliation that they have been subjected to over the years. After all, borrowers pay interest on the financial services they receive.