Digital lending versus traditional lending methods
In recent years there has been a digital boom, everything from shopping to watching television has moved online. The lending industry has followed the same trend and a range of new digital lending products have entered the market. In this blog we will detail what digital lending is, what the benefit of digital lending are and also make a comparison between digital and traditional lending methods.
What is digital lending?
Digital lending is the term used to describe the end-to-end management of credit products through digital channels. The use of digital lending products is allowing financial service providers to offer better products for their customers as well as allowing them to serve customers faster. This includes the application, disbursement and management of loans through digital channels and software.
What are the benefits of digital lending?
There are so many benefits of digital lending but in this blog, we have highlighted 5 of the many key benefits.
1. Convenient application process
Not only do you not even need to leave your home to apply for a digital loan, you can apply any time of day from any location and the whole process only takes a few minutes. This is unlike traditional lending methods which result in a trip to the bank and can sometimes take hours to apply for.
2. Fast processing of loans
A digital loan can be processed in minutes giving you a decision same day, whilst traditional lending methods often have lengthy processing procedures. It is important to know that in order for fast processing, you will need to have all the information required to hand as well as using a secure channel to provide bank details.
3. Increased privacy
Applying for a loan online is completely secure as you don’t need to share any personal details with another person and the channels and programs used to share your details are completely secure. At CREDITONLINE we are fully GDPR compliant as well as being ISO 9001 and ISO 27001 certified to provide you with complete peace of mind.
Access to multiple lenders
A further benefit of digital lending is that you have access to multiple lenders all at once, and can compare the best deals in minutes before deciding on the best loan for you. Unlike traditional methods of lending where you will be required to visit multiple lenders or rely on an independent advisors knowledge, with digital lending you can be certain you are getting the best deal.
5. Less paperwork
No one likes endless piles of paperwork and with digital lending, paperwork is kept to an absolute minimum. You won’t have to spend endless time at a photocopier or filling out forms. Once you have the right information to apply for your loan, the other thing required is a good internet connection.
What are the traditional methods of lending?
Traditional methods of lending have been around for years, traditional lending methods are the types of loans you are most likely to be familiar with. Traditional lending methods often involve a trip to the bank or several meetings with a financial advisor. Whilst traditional methods of lending have their place, for many individuals and businesses digital lending offers greater benefit.
What are the benefits of traditional lending methods?
Traditional lending methods such as borrowing from a bank are generally perceived as low risk and safe. They also tend to offer long repayment terms. You will also receive competitive rates and may also be offered the opportunity for a secure loan by offering collateral such as property.
Is digital lending or traditional lending better for my business?
This is a difficult question to answer as it will depend on your requirements and the state of your business as to which option is best for you. For the majority, digital lending is the better option as it is faster and more convenient, however there are some limitations to digital lending which may result in your business needing to use traditional lending methods.