As long as people have been using forms of money, lenders have been in business. You have probably taken out a loan before or applied for a line of credit from a credit card company. It seems that these are relatively modern practices, but lending and borrowing have been going on for thousands of years. In recent years, the big banks, credit unions and credit card companies have enjoyed having quite a corner on the lending market. This has begun to change over the past few years as alternative financial services have become more prevalent. People are getting payday loans online in record numbers these days. And it appears that the wide appeal of online loans has the big lenders a little bit scared about the future of their industry.
Smaller Dollar Loans
People often face situations where they may need $100 or possibly a few hundred bucks to take care of unexpected expenses. Cars break down, appliances stop working and medical bills often pop up at the worst possible times. As much as the banks might seem like the obvious places to go when you need fast cash, they do not often make small dollar loans. Plus, people who have low credit scores wouldn’t even be able to qualify for a loan from their local bank or credit union in the first place. The big lenders make it nearly impossible to borrow money with a subprime credit score. These are just a few of the reasons that payday loans online have continued to grow in popularity in recent years. Online payday lenders specialize in offering smaller dollar loans to help people make ends meet. And since credit scores don’t have any effect on whether or not someone can get payday loans online, even people with troubled financial pasts can successfully apply for these types of loans.
The Convenience of Getting Payday Loans Online
Anyone who has ever had to sweat it out at the local bank to apply for a loan will tell you that it is no walk in the park. The process can take hours, and applicants are made to feel as if they are being scrutinized every step of the way. Compare that with applying for payday loans online. All a person has to do is go online, visit a trusted lending site and apply for their loan. It usually only takes a few minutes, and people can fully pay off their loans in just a few weeks. There is no long term debt to deal with, as long as borrowers pay off their short term loans on time. Being able to do everything from the comfort of home or at the office makes online payday advance loans much more convenient than the process of getting money at the bank.
What’s Next for Traditional Banks?
In light of all that we have discussed so far, it is easy to see that the banks are losing out on providing services for millions of potential customers. When we also account for the growing number of other online financial services and prepaid options, it is easy to see why the head honchos at some of the larger banks are getting nervous. In fact, many of the largest banks are now beginning to offer financial services and products that they hope will contend with the popularity of payday loans online. As to whether or not these new services will catch on with the unbanked and underbanked households of the U.S., only time will tell…