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Online lenders continue to gain new fans

Oct 01, 2013 Philip Burgess

Going online for convenience is nothing new for consumers today. After all, a lot of people would prefer to shop from the comfort of their own homes, without ever having to move from their couches. It's becoming much the same with borrowing money, as people can take to the Internet for help when they need fast cash in order to make ends meet.

This action should be nothing new to many. During the Great Recession, when many careers were in flux and income wasn't a sure thing anymore amid rising prices, a number of individuals turned to alternative finance companies for help. However, even though the economy is picking back up, some people still need that extra push.

Thanks to modern technology, consumers are going online for this - something that's been the cause of much scrutiny lately, after online lenders based out of Native American reservations allowed New Yorkers to borrow. This practice has been banned in the state, but Native Americans - who own many of these companies - only have to follow federal laws.

Despite the negative and positive press online lenders have gotten in the last few weeks, people are still choosing to head to the Internet for alternative financial help. Perhaps recent studies will convince hesitant lawmakers that individuals across the United States truly want access to more lines of credit.

Online loans set to skyrocket
According to a recent article published by The New York Times, online short term lending is on track to take 60 percent of the entire small dollar loans market by 2016. This means that though people will still head to storefronts for their alternative finance needs, more will go online. It also signifies that if they want to continue to survive into the future, lenders need to seriously consider creating their own websites.

"Applying for a loan over the Internet offers a prospective borrower privacy, convenience and competitive pricing," industry veteran Mark Miller told the newspaper, adding that there are more opportunities to find lenders online as well.

The Times also noted that many within the sector simply see this shift as a sign of the times. There's nothing special about the offerings of online lenders, consumers are simply taking to the Internet for their needs across all different verticals.

However, especially in the current atmosphere, with New York Governor Andrew Cuomo launching a public fight against the industry, online lenders may want to tread carefully and properly vet all consumers and their data before advancing applications.