After the entry of Fintech lending into the market, significant changes have occurred in the loan industry. The good thing is that all these changes point towards a positive direction.

Borrowers have more choices today due to new Fintech lending options. Apart from this, the policies of these lenders are quite different from those of mainstream lenders. You can also call them direct lenders. Customer-oriented Fintech Lending Companies are entering the market in large numbers. They focus on the requirements of borrowers instead of describing strict rules like those of mainstream banks.

Some direct lenders offer specific loan products, and some have a more comprehensive range. Direct lenders usually have short-term loan options available, but they also provide secured loan products.

Let’s see where the direct lenders prove better than the mainstream lenders -

High approval rate despite bad credit score

Bad credit loans are available in mainstream lending and also in Finch Lenders. However, traditional lenders follow quite strict policies in poor credit situations. It is why the loan approval rate is very low in traditional lenders or banks.  

On the other hand, the approval rate of unsecured and secured loans for poor credit in Fintech Lenders is up to 98%. This in itself is a positive factor which convinces people to choose FinTech Lenders. When applying to a direct lender with a poor credit situation, your recent 6 months' financial history plays an important role.

In the case of banks, even if you apply with a strong current repayment capacity, approval chances are low, considering poor payment history. If you need funds as soon as possible, you can choose direct lenders instead of mainstream banks. Direct lenders have a higher chance of getting a loan approved.

Not controlled by regulatory authorities

Regulatory authorities control traditional banks. Thus, regulatory authorities also decide on their policies. The result of this is that once the rules are made, they do not change in any situation. Due to this, borrowers often cannot get a loan. Otherwise, they must compromise a lot on the loan amount and interest rate.

On the other hand, direct lenders are not controlled by any regulatory authorities. That is why they are able to make customer-oriented policies more easily. In fact, they can also make changes as needed. The current repayment capacity is the most important factor for approval in Fintech lending.

If the borrower has the capacity to repay the loan in the current situation, then, despite other financial weaknesses, approval happens. You can try it by yourself. Apply for funds with a strong repayment capacity, and you will get approval.

Fintech lenders grow faster

Growth happens faster in the Fintech market, especially after the pandemic; the global finch market has grown very fast. Due to digital transformation, all financial procedures happen online nowadays. The biggest benefit of which has been received by the fintech lending industry.

New trends emerge every day. By taking advantage of them, the loan companies provide better services and loan features to the customers. Due to advanced FinTech tools, this industry has the calibre to achieve amazing growth levels.

This progress is going to be faster in the coming years, which shows the sustainability of the FinTech industry. This is the reason why individuals and business owners depend heavily on Fintech companies for their financial requirements. If you are also looking for reliable support for instant funds, then direct lenders are a better option for you.

Speedy procedures save time

In FinTech Lending, all the procedures are done online. There is no documentation of any kind. Due to this, the loan procedure is completed faster. From application to fund deposit, everything is easier. Even the verification of documents happens online through direct lenders.

Due to this, Fintech lenders provide instant approval decisions, which is not possible in the case of mainstream banks. In most short-term loans, the money gets transferred to the lender's account in a maximum of 24 hours.

Due to receiving speedy funds, people depend more on direct lenders for their last-minute needs. This is why direct lenders have a higher number of emergency loan options. In fact, there are some lenders who offer specific loan products. For example, many direct payday lenders offer high acceptance loans. In this loan product, lenders transfer funds in the borrower’s account within 1 hour.

Conclusion

From the above comparison, it is clear that the future of the Fintech industry is bright. However, even today, mainstream lending is a more dependable option for many people. By adopting transparency and borrower-friendly policies, FinTech lenders have also won the trust of the borrowers. In this industry, more importance is given to the financial strength of the borrowers than policies and strict regulations.

The aim of FinTech lending is to create a friendly financial atmosphere. They have been successful in it to a great extent. So, if you are looking for a better option to take a loan apart from your mainstream lender, you can consider a FinTech lender.

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