Online Loans - How Popular and Safe Are They?
With the development in technology allowing for safer online transactions coupled with high-speed Internet connections, many people are from the comfort of home. The use of online loan applications is becoming more and more popular.
One study indicates that online purchases of financial services will continue to increase in 2005; this follows a rise of more than 208 percent over the past year or so. Changes in legislation also contribute to the rise in online loan applications. Consumers are now able to apply online without having to return signed paper copies; this small bit of convenience could have a big impact on online financial services. (Hard copy letters will still be sent if any charges for missed payments are incurred or if the loan is canceled.) This convenience also means that consumers can shop around more extensively, which saves both lenders and purchasers time and resources.
Who shops online for loans?
Some research shows that almost a quarter of adults say they would search online for a loan. This is a seventy percent increase over the previous year's response. Almost half of those surveyed in the eighteen to twenty-four age group would search online for a loan, and men are more likely to use the Internet to apply for a loan than women are. Three out of ten men would find a loan online, while only two out of ten women would. Those over age fifty-five are the least likely group to shop and apply for a loan online.
Are Online Loan Applications Safe?
Consumers of online loans are still protected with "traditional" benefits. For example, a "cooling off" period is in effect for online credit agreements for fourteen days, in which time a consumer may change his or her mind without penalty. Consumers are also feeling more comfortable about the safety of online banking. Lenders are working to make online banking safe, and consumers are being more conscientious about keeping passwords and personal information safe. One in five people feel that the safety of online banking has improved significantly over the past five years.
Are Online Loans Just As Good?
The primary difference, when dealing with a traditional lender, between applying in person and applying online is the method; the loans are the same (although the savvy consumer will be wary of potential loan scams and choose a well-known provider). However, because of the convenience and time savings, some banks offer that are exclusive to online customers. This is good news for the consumer. Not only will banks use these incentives to promote online banking, but also, understanding the convenience and the competition, other lenders will compete.