In the past months a new type of loan service has shown signs of rapid growth – Fintech loan shopping tools. At first glance, these new solutions sound simple enough; a way to browse for available loans via online portals. But the success of Fintech services is based on much more than just that, and the trends enabling that success are changing the personal finance market as a whole.
Traditional loan searching can grow complex – at the most, it involves picking a mortgage broker and staying in contact, or driving from lender to lender yourself if you want to compare different loans. Repeat the process for an auto loan, personal loan, home loan…and the time spent adds up. Today's loan shoppers are more interested in a way to compare all different types of loans, from one spot – preferably without fees. And Fintech companies are rising to the challenge, creating new web portals that allow users to immediately switch between different loan solutions on demand. Skipping from loan consolidation options to home equity loans to auto loans allows for a much clearer picture of all debt options…and modern borrowers love looking at their options.
Fintech companies are also busy updating the loan application process, and many welcome innovations have resulted. One of the most powerful – especially when it comes to long-term impact – is the rise of intelligent web forms that make it easier to quickly fill out information online instead of by hand. These forms can naturally populate repeated data to save time, while making it easy for loan shoppers to find out what is available before they start talking with a loan officer. When they are ready to pick a lender, that data they filled out can usually be transferred over automatically, saving even more time. The catch is that online security needs to be robust enough to convince online shoppers to trust the service, which means a lot of encryption – and a lot of content talking about it. We're seeing both among the rising crop of Fintech loan service sites.
When borrowers have found the right loan category for them, they want to be able to compare loans quickly and easily – something like a brokerage, but free of fees and any behind-the-scenes decisions. Today's Fintech companies are stepping up to offer just that: Loan results that try to match available loans from lenders in the Fintech networks to the data that borrowers have provided. It's not a perfect system, but it's getting better and faster. Borrowers have been quick to appreciate a simple email or results page providing ideas about available loans from many different institutions, all in one spot. Of course, this also creates serious competition with more traditional brokerage services, who are now facing the classic tech dilemma of "adapt or die."
When are today's busy homeowners, parents, business owners and millennials supposed to look for a loan? Lender business hours aren't exactly designed for the modern borrower, and that can keep many people from starting the loan process at all. This, perhaps more than any other reason, was why companies began stepping up to create new networks of lenders that were available online. With this approach, interested people can apply, search, and review their results any time that they want, including on the evening and on weekends. That flexible approach has worked well.
Speaking of flexibility, today's Fintech solutions also stand out in another way – they are all accessible on mobile devices. The lending world is slowly adopting mobile means, with most significant financial institutions providing apps, but it's a difficult process, and optimization hasn't always gone well. The Fintech solution is to start from scratch, and create data that can be easily perused on any mobile device.
Reports indicate that around half of borrowers do not look at multiple lenders when shopping for a mortgage. This is an untapped market that hasn't been interested in previous loan comparison channels – possibly because they didn't have much time, weren't sure how to compare, or found the process too difficult. The smoother Fintech solutions are targeted at all these problems, so it's no surprise to see business pick up so quickly.
Visit one of these new Fintech sites, and then visit a traditional lending site: The difference is stark. The modern Fintech sites follow the newer model of website design, with large font, clear explanations, and often features like sparse drop-down menus and continuous scrolling. These visuals send a clear message, particularly to younger borrowers: We're different, we're on the cutting edge, we understand digital technology – and we're making the process about you.
The Fintech sites, in addition to providing basic loan shopping, also tend to offer advice and financial news or explanations. This allows the sites to be used as a source of information as well as a service, which helps bring back customers for repeated visits and encourages browsing blogs, encyclopedias, and other features that may be included.
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