Not very long-ago bad credit or lack of assets left a loan applicant out in the cold. If the bank denied a funding request, loan applicants had very few options. The lending market has changed over the last several years in a metamorphosis unlike almost any other field. The reason this change is so considerable is that it has in fact turned the tables in the loan customers’ favor. This much needed new loan-giving model began as unsecured, retail investor financed loans. As the lending sphere grew and the asset class matured, alternative lending has evolved so much so that many types of loans are now available through online lending. The options for small and medium sized businesses looking for funding have never been so good. Or so varied.
Today, the different types of credit risk underwritten by alternative lenders has grown far beyond unsecured customers to include small business lending, student loans, auto finance and other forms of specialty finance. Loan customers can choose between lines of credit, fixed-rate loans and basically any kind of financing their business requires. Not bad for a market that has only been around for less than fifteen years. In terms of the loan recipients this means they can find funding that wont necessarily mean incredibly high interest rates. For online lenders the significance is that they need to step up their game in order to stay relevant. The lending market competition is fierce.
In order to figure out what makes customers choose one online lender over another it is important to look at the lenders who are considered the best. The leading alternative lenders in the lending market field. Over the last years almost 40% of all US loans were given by online lenders. These numbers are only expected to grow, and lenders should be prepared for competition. The following list tries to give an idea of what makes an online lending platform stand out above the rest.
What are Loan Applicants Looking for in a Lender?
- When it comes to online lending the faster the process - the better. One of the appeals of
online lending is eliminating the never-ending, nerve wrecking process the bank puts applicants through when loans are on the table. The online lender with the quickest approval process has a very important advantage over others. Time is definitely of the
essence, when loans are on the line.
- Some brazen lending companies have gone one step further and do not even have an
application process. Instead they connect their loan applicants with specialists whose
intent is to find the specific loan terms tailored to the applicants’ needs. This way, the scary part of trying to understand which terms are best for a client’s specific needs, is already solved.
- Offering financial guidance right off the bat is also an important tool. While the online process is fast, it is also non-personal. Many loan applicants miss the feeling that someone is looking out for them, meeting their needs and walking then through the process. Loan applicants, especially young and inexperienced appreciate an uncomplicated method of solving their monetary dilemmas.
- Flexibility is an important aspect in finding the right loan. The idea that the lender is aware that things might change for the loan recipient and is ready for any scenario is also very appealing. This element is also very different from the cold, strict norms of the banks, and paints the lender as more compassionate and human.
- As with any business that caters to clients, customer service is a key element in a lending group that is determined to satisfy its clientele. While the urge to close a deal might be hard to suppress, most clients would feel better not being pushed into an agreement. Taking the time to make sure the client knows exactly what the best course of action for them is, before trying to seal the deal, is a much better plan. Research shows that Americans of all ages are tired of being treated as a potential “sale” and would prefer a friendly conversation.
- Being polite is always important. Nobody wants a salesperson that does not have the time to discuss their issue. Being transferred to voicemail automatically is also an off putting problem. Be available for potential clients, otherwise they will find someone else that is.
Some Important Points to keep in Mind:
- The companies who take the time to meet their loan client’s needs and expectations are those with the higher ratings on online review sites like the Better Business Bureau. Just like any business, reviews can be a dealbreaker and even one bad review can have a negative effect. Treat your potential clients well, even if the loan is not going to work out.
- The alternative lenders considered at the top are the ones that are going beyond offering regular service. Some offer an all-inclusive, easy to understand payment process that their clients can follow online. Others don’t take an origination fee. The point is if the lender is doing something unique, it will generate attention. And attention means business. Great lenders consider what makes them more lucrative for potential borrowers.
- The fact that some lenders don’t have strict rules in regards to how the money they lend is used is also an additional perk. If a client can use the money for marketing and not just for equipment, the freedom is a decisive plus. Once again, setting yourself apart is an important element in business. Lending or otherwise.
As in any sphere, the lending companies that are going the distance are the ones unafraid to think outside the box. Anything a lender does to create a significant, positive experience can help generate more clients. Thinking about the loan client’s process and how to simplify it, is a way forward. Alternative lenders stand for revolutionary change, for escaping the credit worthiness assessments of banks and for a technologically advanced approach to money management. The key to success in this field are bold, innovative moves that allow borrowers to take on loans with confidence. After all, risk taking is the essence of innovation and is essential to business growth.