Will Personal Loans From Banks Push Online Lenders Out of Business

It is unlikely that the banks offering personal loans will push out online lenders from the loan industry because online lenders have much better terms to offer. In fact, the popularity of online lending marketplace is now on the rise while banks are getting more and more pushed aside.

According to the Wall Streets survey report, traditional bank’s business loans share in the market is dropping while non bank lenders are having higher share in the market. Many traditional banks are reducing the number of business loans that they issue because they simply cannot cover the overhead cost to make enough profits from them.
The new regulation issued by the CFPB is making it harder for banks to issue small loans. As a result, people who need to borrow a small amount of money must turn to online lenders.

More people are turning to online lenders because they approve loans faster. Banks often have lengthy loan application process and they can take a long time to perform the credit check. There are lots of documents you need to submit and not submitting a single document will result in the delay of the approval process. They also will make several phone calls and ask you a lot of questions. It is hard to meet with the manager to negotiate with the bank for a lower rate.

Many online lenders can give a fast decision in 1 – 2 weeks so there is no longer the need of waiting for a couple of months to know whether you qualify for the loan. The interest rate for online personal loans is also may be more affordable compared to banks because online lenders have a much lower operation cost. The speed of the approval process and its affordability are the reasons why online loans are more appealing to younger borrowers.

You can apply an online loan at anytime by filling the form at the lender site. It can be more troublesome to apply for a loan at a bank because the banks can be filled with lots of people during weekdays and you have to queue up for a few hours until it is your turn. Many online lenders perform soft inquiry first so you can check your interest rate without hurting the credit score. They also do not force you to accept a loan offer. You can take your time to review your loan offers and decide which one to choose.

It is easier to get approved for an online loan if your credit score is not that good or you are lack of credit history. With the online loan comparison search engine, you can find online personal loans lenders that will accept your credit score.

Leave a Reply

Your email address will not be published. Required fields are marked *