Financially speaking, a loan is a process of lending money to individuals or groups. By taking the loan, the recipient occurs a debt, which must be paid with an interest rate. Loans have always played a big part in the financial sector. The main institutions that are handing loans are banks and credit companies.
For the bigger part of history, people trusted banks to issue loans that had to be paid back after a certain time. But, with the rise of the Internet, a new possibility was revealed – online lending. This business became one of the most demanded and most profitable in the online world because people started favoring the online lending companies far more than the banks.
Although the idea of trusting a virtual company rather than a financial institution with a great reputation is a bit weird, it is fair to say that online lending companies are far more efficient in the process than the banks and we are more than willing to explain why.
After the world crisis in the late 2000s, banks were far stricter with clients when dealing with various loans. After all, that is how the crisis shook the world. Financial institutions were giving big credits and small loans to everybody, without checking the background. After the world was saved from that financial disaster, it was far more difficult to get an approved loan.
Numerous consultations were required, the background checks were run deeper, and the loan approval rate started reducing drastically. People were constantly denied, even though a lot of them met all of the requirements.
That is when the idea of online loans was born. These lending companies were giving loans of various sums without making the process so complicated. So whenever people needed a fast loan, instead of going to the banks, they just went online and searched for the best companies.
The two main pros that define online lending companies are simplicity, approval rate, and time-saving. Let’s start with simplicity. When applying for loans at online lending companies, all you have to do is fill an application. All of your data is reviewed and based on the information, you get certain feedback for the company. When your loan is approved, you can always check your status by just visiting their website.
The percentage of approved loans is far greater than the one with banks. On average, more than 70% of the people applying for a loan online are approved. That number is far greater than the one at the banks.
Finally, we have time-saving. People always complained about having to take multiple trips to the bank to check their status or just for a short consultation. With online lending companies, the process of spending time is excluded. Like we mentioned before, you can check the status of your loan at any place and time and if you require consultation, you just send an email or contact Support via the website and they will reply within hours.