It used to be that you needed to go into a bank to ask for a personal loan. While there, the bank employee would get you started on an application and review your information before determining whether they could advance your funds.
Since the digital revolution, that process has changed drastically, and more people have borrowed online as technology has gotten more advanced.
Nowadays, online loans account for some 60% of all personal loans. FinTech services, such as online direct lenders, take up 38% of all unsecured personal loan balances.
While it’s a matter of personal preference, borrowing money online is convenient. If you need to borrow money, here are just some of the benefits of going online for your next personal loan.
1. Socially Distanced
With social distance restrictions and mask mandates dropped across the country — and most of the world — it’s up to you whether you feel safe going in person to a bank.
That said, hospitalizations are on the rise again at the same time flu season has arrived. Plenty of immunocompromised people are limiting how often they go out before the holidays to limit the risk of getting sick.
Online loans offer an alternative to crowded banks. You can apply for and manage your loan online without ever stepping foot in a physical location.
2. End-to-End Loans Are More Efficient
Many online direct lenders and banks have automated their lending systems. This means a few things from the borrower’s perspective:
- Convenience: Applications are available online 24/7, not just during business hours. You can learn if you qualify relatively quickly before moving onto the next step.
- Speed: AI also increases their approval processing speeds, which makes them faster than manual underwriting.
- Accessibility: Some online direct lenders and banks rely on AI to process the disbursement and payments of your loans online. In these cases, you’ll know them by direct deposit loans, as you can set up automatic deposits and withdrawals from your bank account.
3. Greater Options
The Internet brings the financial world to your fingertips. With the right keyword and a little patience, you can find out almost anything you need to know about the borrowing experience—from money management tips to more specific details about loans online.
You can also research lenders and loans from a variety of sources, comparing them for the best rates and conditions. You can narrow down your search, personalizing your options according to how much you need to borrow, your credit score, and interest rates.
Compare this to traditional, in-person banking. Following the old-fashioned way, you would have to go to a physical location to learn about that particular bank’s options.
If you don’t like what they offer, you have to visit another brick-and-mortar storefront until you find something that works. You could have to visit several banks, some of which may be far away.
The Takeaway:
Rapid digital acceleration in the past five years has transformed the way people borrow, and there’s a good chance you can expect even greater changes in the next five. Until then, going online for your next personal loan can help you research your options, streamline your experience, and stay safe.
Originally posted 2022-12-22 11:52:13.
