Non-banks and alternative lenders have drawn attention in the banking industry for their ability to work with legacy banks and leverage technology to make financial transactions more efficient and convenient for users.
Consumers are drawn to the idea of completing loan applications and payments digitally, with no initial fees and low interest rates. Alternative lending firms and non-bank financial institutions have been able to meet these needs by adapting to the digital age and staying open to business growth.
Here is a list of some of the best alternative credit competitors.
1. Accelerate loans
In 2015, Quicken Loans changed the mortgage industry with the introduction of Rocket Mortgage – his online mortgage application, which supposedly takes less than 10 minutes. With no other viable challengers to the status quo in sight, this online application was immediately attractive to tech-savvy applicants.
Rocket mortgage drove Quicken Loans into the digital mortgage sector – Changing the traditional home loan application process and opening the door to smaller online lenders. According to Business Insider Intelligence Online Mortgage Loan Report, until the fourth quarter of 2017, Quicken Loans was the largest by volume originator of residential real estate in the United States.
Learn more about Accelerate Loans.
2. Loan deposit
LoanDepot became popular in the mortgage loan market in 2017 when it introduced a suite of tools that enable consumers to complete mortgage loan applications from the convenience of their smartphone.
This alternative lender has funded over $ 165 billion since it was launched in 2010 and is the fifth largest personal lender in the country – second place for largest non-bank consumer lender.
Learn more about Credit deposit.
PennyMac is always one step ahead of its alternative credit competitors by continuously adapting to consumer digital preferences. PennyMac provides online users with digital lending assistance and enables consumers to submit documents electronically.
With no minimum income requirement, PennyMac offers a variety of loan options ranging from conventional and jumbo loans to US Department of Veterans Affairs and Federal Housing Administration loan and mortgage programs.
Learn more about PennyMac.
OnDeck’s digital technology services and partnerships with established financial services providers have secured it as one of the best alternative credit options for small and medium-sized businesses (SMBs).
In 2018 OnDeck introduced ODX to help banks build their own digital credit products for small businesses. The company also partnered with JPMorgan in 2014 – and extended the partnership in 2017 – create a platform that enables small and medium-sized businesses to access loans of up to $ 200,000 online.
Learn more about OnDeck.
5. Social finance (SoFi)
Originally geared towards refinancing student loans, SoFi now includes refinancing of mortgage loans, mortgages, and personal loans. In 2019 SoFi expanded its offering with the introduction of SoFi Investthat offers clients both active and automated investment opportunities with no fees.
SoFi’s success as an alternative lending platform is largely due to its continued commitment expands its range of financial services. In addition to the introduction of SoFi Invest, the company also teamed up with the insurtechs Lemonade and Root in 2019 to expand its product range to include three additional types of insurance.
Learn more about SoFi.
6. Reali Loans
Reali Loans is an online alternative lending platform that doesn’t charge a commitment fee or upfront fee and tech-savvy customers are looking for a convenient way to find loans.
Reali’s platform allows users to fill out a loan application entirely online; Customers can upload and sign documents electronically and track the progress of their credit, including payments, through the user dashboard.
Learn more about Reali Loans.
Kabbage is another online lending platform that has earned a spot on the list of leading non-bank financial institutions. The startup offers business-to-business (B2B) operations and secured a revolving credit facility of $ 200 million in July 2019.
Particularly popular in SME loans, Kabbage offers a range of digital services that allow customers to link business information online for automated financial auditing. Kabbage also allows users to withdraw from their lineage by three different methods: Logging into a computer, using a Mobile banking app, or swipe a Kabbage Card.
Learn more about Cabbage.
PayPal is a popular peer-to-peer (P2P) lending service that Business Insider Intelligence says will grow to $ 574 billion by 2023 at an average annual growth rate of 42.7% over five years. PayPal also owns Venmo, a popular P2P lending app with Millennials and on track to grow to $ 100 billion in 2019.
PayPal offers a variety of security services, including alerts of suspicious activity, as well as easy check-out options that allow users to conduct financial transactions online. By adapting to consumers’ favorite digital channels and offering personal and business credit options, PayPal has become popular with a wide variety of users.
Learn more about PayPal.
the Banking industry is changing rapidly as consumers show an increasing appetite for digital channels and nontraditional finance. As the integration of new technology into financial services has advanced, it is important for key industry decision makers to stay informed about the success of alternative lending and non-bank financial institutions.
That’s why Business Insider introduces Intelligence Banking, our latest research area, that will keep you updated on how non-banking and alternative credit services are making their way to the forefront of the banking industry.
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