How New Technology is Improving The Loan Process

How New Technology is Improving The Loan Process

Anyone keenly following the stock market is aware that borrowers and lenders are in trouble. Finance professionals will most likely tell you that the

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Anyone keenly following the stock market is aware that borrowers and lenders are in trouble. Finance professionals will most likely tell you that the lenders are having a tough time. However, lenders are unlikely to be challenged by this.

Peer-to-peer lending is changing the lending scenery and many traditional lenders are not happy about this. The idea of peer-to-peer lending took shape during the 2008 recession. Traditional lenders left many Americans without any financial solutions during the recession after they rejected loan applications. Peer-to-peer lending has increasingly become popular because it by-passes strict regulations that traditional lenders must adhere to. Traditional lenders are looking to oust the founder of peer-to-peer lending, Renaud Laplanche mainly because of loan irregularities and lack of disclosure. Businesses are more likely to attract unscrupulous dealing when they are not regulated. Still, without regulations, peer-to-peer lending is becoming more popular. Traditional lenders are now forced to embrace technology if they want to remain in business.

Decreased borrowing from traditional lenders due to unattractive interest rates and high loan rejection has seen them try to cut down operational costs and embrace technology. Technology can benefit both the lender and the borrower. Traditional lenders have been left with no option but to embrace technology if they still want to survive.

One such company embracing technology in its loan process is Wells Fargo. Wells Fargo recently launched FastFlex Loan, an online lending marketplace. Borrowers can access loans ranging from $10,000 to $35,000 with a friendly weekly repayment schedule. Interest rates depend on the creditworthiness of the borrower/ business. FastFlex Loan is designed to attract small businesses which are looking for short-term loans that can be easily accessed. Online borrowers fall into this category of short-term borrowers and are mostly locked out by traditional borrowers. Wells Fargo is the first major bank that has built an online lending platform breaking the norm from other borrowers.

J.P. Morgan recently partnered with Chase bank with its OnDeck Digital borrowing marketplace targeting small-dollar loans that can be accessed quickly. This partnership will most likely benefit the everyone and most likely uplift small businesses. The future looks bright for borrowers looking for quick access loans.

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