Interesting report from Smarter Loans on the state of the alternative (non-bank) lending industry in Canada
A few of the insights from the 2019 Study:
- Industry on the rise: nearly 70% of respondents agreed or strongly agreed that they are well informed about the options available to them, that the online application process is fast and easy to complete, that borrowing from online lenders is safe and that lenders are transparent about their fees, terms and conditions.
- More loan providers on the market: 60% of respondents research between 3 and 9 loan companies before making a decisions.
- Consumer trust increasing, but still needs work: 30% of respondents said they didn’t feel that the overall borrowing experience felt entirely safe and wish there was more transparency about fees and terms.
- Consumers getting more familiar with options: 30% of respondents said they first approached a traditional financial institution before seeking an alternative provider, up slightly from 29% in 2018.
- Personal loan consumers prefer FinTech loan providers: according to the data, Canadians are still more likely to seek a mortgage or business loan from a traditional financial institution, such as a bank.
- Online loans are getting even faster: this year 48% of all applicants received their loan the day they applied, up from 43% in 2018. Another 38% received it within 3 days of applying.
- Financial companies with strong online brands are winning, especially among young people: online search is by far the most popular form of research for loans across all age groups. The youngest borrowers were more likely to read online articles and reports before making the decision on which lender to apply with.