Loans traditionally come from a bank. However, there are alternative loans that exist outside of this industry. Alternative loans are typically through online lenders. There a wide range of online loan options outside of the traditional bank loan that are typically used when an individual or business owner can’t obtain a traditional bank loan for several reasons. Traditional bank loans may have a more rigorous application process and qualifications for the loan. Alternative lenders tend to be easier to obtain. Because they are easier than traditional lenders than they are often quicker. So how is this market doing in Canada? Why?
The industry has seen a rise in interest as years pass. The interest has been trending upwards since 2013. This rise is probably due to the popularity and regularity of online technology. Alternative lenders can be searched for online easily which is why they have become the go to standard in lending. Who wouldn’t want to just apply and figure out their loan situation from their home or office? Since the internet, it is now easier to research lenders as well. You can look through their websites, read reviews, contact them to get your questions answered, and read articles and reports. The research is mostly done online research has shown.
The consensus is that Canadians are satisfied with their alternative loans. The fact that they are getting the loan on the same day or within days (typically) is a huge plus. When you need a loan and you do your research you are typically looking to get your funds fast. With alternative lending this is possible. Because it is online, they tend to be more popular with the younger crowd. The older population is skeptical of trusting alternative lenders.
Causes of Concern
Most consumers are happy with their experience but there is room for improvement in some areas. The main areas that seemed to bother people who have gone through the online process is poor customer service or confusion. This is common with online services because you are doing it all on your own and sometimes can have difficulties. Trust is another concern with online lenders. With the internet it seems as though anyone can create a site and possibly trick people. In a study done, it was almost half who said they were skeptical of online lenders. The top five reasons for improvement as stated in the study were 1.) Approve more people with bad credit so it gives them a chance to improve, 2.) Be more flexible with income types, 3.) Focus more on income rather than credit scores, 4.) provide better customer service tools, and 5.) provide more information about the loan terms and criteria to be approved.
Research shows that alternative loans in Canada is on the rise. It will most likely grow to become the norm in a few years. The causes of concern will eventually be addressed and be fixed to make the alternative lending process smoother.Like What You See? Share the Story!