People who have gone through the ordeal of getting a mortgage know exactly how painful and slow the entire process could be. Moreover, if you are having bad credit, it would be near impossible to secure any kind of loan.
With consumer frustration and distrust going up to an incredibly high 57 percent as per the Harris Poll, we understand that there is a major issue that needs to be addressed and resolved at once.
Fortunately, technology and entrepreneurs are joining forces for solving these critical issues that conventional lenders and banks have failed to address for decades now. These organizations are swiftly moving in and smartly capitalizing on the current need for advanced techniques in lending.
Be it peer-to-peer technology or Fintech today, there are endless ways for new organizations to make the entire lending process easier. Loans are currently less cumbersome to pay off, easier to get, and certainly less frustrating and less stressful experience.
As per forbes.com, financial technology startups have been attracting an increasing amount of capital and attention. In 2018, we know that the valuations of the largest private organizations bulged and we understand that at least, six brand new Fintech unicorns established a strong foothold in the United States. If statistics were to be believed Fintechs were successful in raising $12.4 billion in terms of funding that meant 43% more as compared to 2017 according to CB Insights.
With the advancement in technology, companies are trying their best to make all financial services far more efficient, transparent, and even user-friendly by introducing path-breaking products and services, providing novel techniques of moving money or processing payments and usually, generating new ways of cost reduction and enhancing the overall user experience.
Technology has left its profound impact on online lending thanks to cutting-edge technologies. By developing a whole new marketplace for certain alternative ways of borrowing money, both for individual customers and businesses- marketplace lenders, online lenders, platform lenders, and P2P lenders have all welcomed with open arms the technological innovations for driving efficiencies, expanding opportunities, and cutting costs. Today reputed organizations such as Liberty Lending
have embraced advanced technology and have become a key player in the lending scenario trying to help the borrowers who were never considered by the traditional lending organizations and banks. Here is how technology has completely transformed and revolutionized the existing lending industry.
By Coming Up with a Plethora of Niche Products
For years traditional financial institutions and banks followed a cookie-cutter approach when it came to loan products. However, thanks to the technological leap, online lending companies have been successful in doing a comprehensive analysis of the unique needs of their customers. This went a long way in creating many niche products that catered to diverse segments of the customers.
Due to the introduction of some ground-breaking processes and innovative tools today users have easy access to some unique financial products such as loan comparison, line of credit, business invoicing, loan listing, factoring loans, credit counseling, and investment management, etc.
By Facilitating Quicker Loan Approvals & Funding
We know that traditionally, the entire loan application process, sanction, and even approval would be an extremely complex and time-consuming affair. You had to necessarily deal with loads of documentation or paperwork and bureaucratic processes or red tape before receiving the loan approval.
Technology has helped in eliminating the documentation and endless waiting. Today, you can put in your loan application online and receive the approved loan amount within a day, all thanks to technology.
Online lenders are capable of moving faster. Online lending technology can help customers with fast loan approvals because these platforms are capable of automating most of the underwriting and the loan approval process.
Unlike conventional banks that are often utilizing antiquated legacy systems, we understand that technology-driven online lenders are having a cutting-edge technology foundation which is adept at delivering real-time data evaluation, faster loan decisions, and constant monitoring of the creditworthiness of the loan applicants.
By Allowing Effective Data Utilization
Technology has made lenders far more data-driven. Today lenders are far more enthusiastic about identifying innovative ways of risk assessment and creditworthiness of borrowers in effective ways which go much beyond simply a credit score.
For instance, today lenders would like to examine a wider spectrum of data for determining whether an applicant is eligible for a loan like online dales totals, social media reviews, accounting records, and shipping data. The data-driven factors for lending are often fairer and egalitarian as compared to credit scores.
By Automating Crucial Processes
Apart from utilizing data for determining the borrower’s creditworthiness, lending companies today use cutting-edge technology for automating many processes. For example, some organizations have already automated borrower risk evaluation, hence, accelerating the entire lending process. Thanks to automation, organizations are effectively cutting down overhead expenses and offering competitive rates of interest to the borrowers.
By Making Loans Easily Available to the So-Called ‘Ineligible Borrowers’
Small business owners, startups, and entrepreneurs in the past had found it extremely challenging to get loans from conventional lending platforms. Moreover, loan approval became doubly difficult if the loan applicants did not have any collateral and had a poor credit score. However, due to the innovative lending models today, lenders are approving funds to previously ineligible borrowers.
By Giving Top Priority to Security
Today lending companies are using the latest and most advanced technology which does not at all compromise on security. They ensure the safety and privacy of consumer details and take effective measures to prevent any data breaches.
Technology-driven online lending will be helping the financial services landscape become far more responsive to consumer requirements, really efficient, fairer, and more accessible to borrowers particularly, the ones who are not able to fulfill the ideal standards and eligibility criteria for a conventional bank loan.
Today, we can truly understand what Bill Gates had once mentioned ‘Banking is essential, but banks are not.’ Technology is massively transforming the entire loan process in amazing ways. Technology has reshaped the loan process and revolutionized the entire online lending industry. This implies that an increasing number of borrowers are gaining access to capital. Moreover, loans have become hassle-free and more affordable than ever before.