Online lenders have become very popular in the last couple of years. When people think of getting a small personal loan, the first thing that comes to their minds is lending companies like Asteria.
It seems that their trust in the banks has declined, especially because the banks have a strict system and low approval rates lately.
The fact is that they don’t want to deal with individuals and small amounts of money. They are more interested in big clients because they can make millions of dollars in profits from them. So, how do the online lending companies work and how did they become so popular? Here are some interesting facts about them.
High Approval Rates
Online lenders have tremendously high approval rates. Unlike banks, they don’t do thorough background checks to see if you can pay off your loan. Instead, they run algorithms that combine all of the provided data and give information on how trustworthy you are. Statistics have shown that the average approval rate at online lenders is close to 80%. Compared to the banks, their approval rate is around 60%. While almost half of the clients are denied at banks, that is not the case with online lenders.
Responsive to Individual Needs
One of the best things about these lending companies is that they are very easy to deal with. Their services can often be tailored to individual needs as a way to satisfy the client’s needs. To make things even better, their procedures are very short. If you want to apply for a loan, all you have to do is fill out their online application form and wait for a response. The waiting process is a few days, but sometimes it can take a week. Either way, it is still way faster and more time-saving than the banks. In short, they are both flexible and trustworthy.
Perfect for Small Loans
Since their main expertise is small, personal loans, you can rest assured that you are dealing with people who have great knowledge of this area. Like we mentioned earlier, banks are not targeting individuals after the 2008 world crisis; their goal is to have bigger clients, unlike online lending companies. They are there to support you and give you advice on every step of the process. You can also browse through their offers on their websites and have a clear view of the loans that suit your needs the best.
Two countries are leaders in the development of online lending companies – the United States of America and the United Kingdom. The USA is the country with the highest number of investments in this sector. On the other hand, the UK has the biggest activity in it. Some statistics have shown that 80% of lending activity in Europe is concentrated in the UK.