Top Drivers for Non-Traditional Installment Loans:

Top Drivers for Consumer Non-Traditional Installment Loans with Credit Cards:

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The data for today’s episode comes from the Mercator Advisory Group report: Installment loans: Fintechs are gaining ground on loan forecasts of $212 billion

Top Drivers for Consumer Non-Traditional Installment Loans with Credit Cards:

  • 309 borrowers surveyed took out an online loan because it offered a better and more convenient experience than going to the bank.
  • 285 borrowers surveyed took out an online loan because it offered more attractive loan terms than a bank.
  • 259 borrowers surveyed took out an online loan because it offered lower interest rates than a bank.
  • 231 borrowers surveyed took out an online loan after being rejected by their bank.
  • 209 borrowers surveyed took out an online loan because they believed online lenders would be more likely to approve their loan than a bank.
  • 166 borrowers surveyed took out an online loan because they were quicker to get approval than a bank.
  • 56 borrowers surveyed took out an online loan because their bank didn’t offer the type of loan they needed.

About report

The Mercator Advisory Group published a report on trends in installment lending entitled Installment loans: Fintechs are gaining ground on loan forecasts of $212 billion. The study explains the state of consumer mortgage lending in the United States and how fintechs and financial firms are outperforming banks and credit unions in consumer mortgage lending. In addition, this study examines how companies offer embedded financial products such as CCaaS to enable customers to offer their own credit card product. Using four evaluation criteria, general guidance is provided for those seeking a relationship with a fintech provider.

“Banks used to dominate consumer lending, with installment products being much cheaper than credit cards, but that’s no longer the case,” he comments Brian Riley, Director of Credit Practice at Mercator Advisory Group, and the author of the research report. “Buy Now, Pay Later (BNPL) was a wake-up call for credit card issuers. BNPL was a rewrite of a merchant finance model long ago used by companies like GECC (now Synchrony) and Household Finance Corporation (acquired by Capital One). Now, fintechs are moving in the same direction with installment loans,” says Riley.

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