Technological advancements continue to shape an exciting future for the credit industry. Back in the day, you can only borrow from family and friends, bank or government entities, credit institutions, or beg your employer for a salary advance when you need quick cash.
Thanks to modern technology, you don’t need to go through this arduous process. Lending companies have introduced new ways to make the process swift for borrowers and creditors alike.
Today, there are inexpensive loan options tailored to meet every borrower’s needs. With this, credit consumers have something to fall back on during times of crisis, without the stress and hassle of meeting with lenders face-to-face or having to wait for a loan approval that may or may not come.
Technologies and Trends that are Transforming the Loan Industry
From loan apps to peer-to-peer lending, lending companies present credit consumers with these fascinating tools and systems for a more convenient approach to borrowing money.
- Mobile Wallet
Your smartphone now also serves as your virtual credit or debit card. A mobile wallet is a no-fuss money app that consolidates your financial information so you don’t have to pay in cash or swipe the physical card on POS systems.
Using the app allows consumers to purchase anything, such as groceries and apparel as well as pay for utilities and bills. In the same way, lenders can wire the approved loan amount directly to your mobile wallet, without issuing a paper check.
- Online Lending
Online lending is at its peak. Unsurprisingly, it’s also one of the fastest ways to apply for loans and receive funds for unexpected emergencies. It also eliminates the need for borrowers to physically go to a lending institution to apply for a loan.
You can simply go online and directly submit your loan application to an online lending service provider . You’ll have to provide digital copies of the necessary identification, documents, and proof of income to get it processed. Once approved, the amount will immediately reflect on your account.
- Consumer Financing
If you’re already short on cash but then you suddenly need to replace a broken home appliance, don’t fret. You can buy a new one without waiting for your next paycheck with consumer financing.
Consumer financing, also known as basket financing, allows a borrower to apply for a small loan to shop for basic consumer goods such as appliances, electronics, clothes, and more. You can purchase new appliances and furniture on the same day your loan gets approved.
- Peer-to-Peer Lending
Would you dare borrow money from a stranger? With online peer-to-peer (P2P) lending, you can do so without fear or anxiety. Peer-to-peer lending elevates the age-old concept of borrowing money from friends and neighbors, by increasing your network to include everybody in the system.
P2P eliminates third-party contacts. The system pools cash from members, which then becomes a source of funds to grant borrowers. The process is done from start to finish within a P2P platform. Since it’s a more relaxed form of money lending, borrowers can choose a repayment term that best fits their situation.
- Loan Aggregation
For borrowers who are unfamiliar with loan processes and don’t have time on their hands to do the legwork, a loan aggregator can help. A loan aggregator shops around for the best loan option for you, so you can get the best deal. Loan aggregators gather personal information you’ve already given out to a potential lender. Then, they show this to other lending providers who might have a better loan offer.
While financial institutions manage to keep up with the pace, there is a roster of new schemes today that makes loaning quicker and friendlier for borrowers. Here’s an infographic to better illustrate the latest tools and systems that are taking over the business of borrowing and lending money.