Borrowing Money in the Digital Age is a Simple Affair
The days of getting in your car and driving to your bank to ask for a loan are long gone. Borrowing money in the digital age is a simple affair since technology has forever changed lending. Today, you can get a loan from the comfort of your home. All you need is a little bit of time and a laptop.
The Digital Age Has Transformed How People Borrow Money
While there are a number of benefits to online borrowing, the top four are convenience, privacy, anytime access and technology. According to Money Guru1, online loans are convenient because you can gain access to them quickly and from practically any location. Since all you need is a computer to get started, you can apply for a quick loan while you’re watching TV or just before going to bed.
If you’re the type of person who prefers to keep financial matters private, then you’ll especially appreciate requesting money from the comfort of your living room. This means that you won’t run into anyone from your neighborhood in the bank queue line.
The anytime access of borrowing money in the digital age is another feature that makes it a simple affair. Unlike traditional financial institutions, you can request money 24 hours a day and seven days a week online. If you apply for a loan in person, you’ll have to go through the trouble of making an appointment during normal banking hours. Along with this, banks are institutions that honor all of the federal holidays. Online lenders allow you to apply for a loan at any time.
Online lending lets you take advantage of technology. For instance, today’s lenders can link to your checking account directly. This feature makes it possible for them to transfer the loan funds quickly. Technology also makes it easy to compare annual percentage rates and track your application.
It’s Easier to Borrow Money with Bad Credit Online
If you need to borrow money with bad credit, doing so is easier online because you have access to more lenders, ones who will consider more than just your credit score when deciding whether or not to approve you.
Digital advancements have made it painless for lenders to collect and go through data. This step lets them find people who they deem creditworthy among borrowers who wouldn’t be eligible for a traditional loan. It also allows them to avoid lending to people who won’t be able to repay the money.
Digital Lending is Changing the Financial Landscape
Reckless lending led to the boom that came before the financial meltdown of 2007 and 2008. The meltdown also ruined a number of borrowers. A former chief Google information officer, Douglas Merrill, was inspired to launch his company, ZestFinance, based on his belief that conventional credit scoring was causing people to be denied for loans when their only fault was lean credit records.
According to The Economist2, to lend money to people, the company uses software that lets it check more data. For instance, the lender can review whether a borrower pays his or her rent on time or uses the same cellphone number as a contact number for all of his or her accounts. This thickens a lean credit record.
There are Many Benefits that Come with Digital Borrowing
The Information Age3 reports that financial technology decreases lending costs because online lenders can process loans more efficiently. This brings down annual percentage rates. Reduced costs may result in lenders loaning money to people with less secure credit scores.
Moving faster through the lending application process is another benefit that comes with digital borrowing. These lenders are able to make data assessments in real-time. Lenders who operate online are able to monitor a borrower’s creditworthiness on a continuous basis, protecting their business. These lenders also make quick lending decisions.
While change is happening, many traditional banks still use antiquated loan processing systems. The ones who do are unable to approve loans as fast as most online lenders. Traditional financial institutions will never go away completely. But, people’s concept of banking and what services must be taken care of by banks is starting to change.
Digital lending is making the financial services sector operate more efficiently. It is also becoming more responsive to the needs of borrowers. Along with this, the expanding market is making money more fair and accessible to all borrowers since these lenders are likely to take other financial factors into consideration when making a lending decision.