Innovations in the Lending Industry

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FinFabrik
August 22, 2020
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The lending industry is a rapidly growing one, with innovations being introduced all the time. Of course, it's not always easy to keep up with the latest advancements and the changes they bring to the industry. This article will walk you through some of the most notable innovations introduced in recent years.

1. Online lending: Online lending is becoming increasingly popular, especially among younger generations who are more comfortable using technology than their parents are. They no longer have to sit in an office waiting for hours or days on end while they're turned down by one bank; now, they can fill out an application online and, if approved, get their money within minutes!

2. Peer-to-peer lending: Peer-to-peer loans allow borrowers to borrow money from other individuals rather than banks or other financial institutions. As a result, they incur lower interest rates because there's no intermediary involved in the process—they just connect directly with their lender via an online service. It has become trendy among millennials who don't want to deal with traditional banks but still need access to credit at reasonable rates when needed.

3. Bad credit lending: One example of such innovation is the advent of lending for bad credit. While traditional lenders have only been willing to lend money to individuals with good credit scores, there are now lenders out there willing to take a chance on those with a less-than-stellar financial history. Moreover, these lenders are willing to offer competitive rates for these applicants.

Innovations like this make it easier for people with poor credit scores to get approved for loans, which can help them get back on track financially and build the credit score they need to access better interest rates down the line.

In recent years, we've seen several innovations changing how people buy homes and refinance their mortgages. For example, companies like Zillow and Redfin offer online tools that allow prospective buyers to search for homes in their area and even tour them virtually. In addition, the advent of new mobile applications has made it easier for homebuyers to get pre-approved for a loan before even stepping inside a real estate office.

The rise of these new tools has also led to an increase in unconventional mortgage products. These include piggybacking loans, where two individuals can combine their incomes to get approved for more debt, or payment options that allow borrowers to pay down their principal over time instead of making monthly payments on interest only.

These developments have made it easier than ever for people who don't have perfect credit scores. Also, this is available for those who cannot obtain financing through traditional means to purchase homes or refinance their existing mortgages. We think it is imperative as we look toward the future of real estate!

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