TORONTO, Jan. 7, 2020 /CNW/ - As Canada's alternative lending industry continues to mature Canadians are gradually becoming more comfortable utilizing its services.
According to the State of Alternative Lending in Canada 2019 Study, published by Smarter Loans, which gathered the feedback of 2,415 Canadian alternative lending customers, many of the country's providers continue to receive top marks for their services.
Overall Canadians were slightly more approving of the online lending industry this year, ranking it 3.4 stars out of a possible five, up from 3.2 stars in 2018.
Some products, services and providers, however, are much further along than others. The study dives into many areas of alternative lending in Canada, including the key areas that are doing well, and opportunities where the industry needs to improve.
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.
"Smarter Loans helps connect people that are looking for financing with some of the top lending companies in Canada. It is important for us to conduct this research in order to better understand the experience that Canadians are having. By being the bridge that connects borrowers and loan providers, we work together with the lending community and share these insights to improve the borrowing experience for all Canadians." said, Rafael Rositsan, CEO of Smarter Loans.
About Smarter Loans:
Smarter Loans is Canada's online loan directory for any type of financing. The website helps Canadians find reputable lenders and compare their financial products, rates, and terms in one place.
SOURCE Smarter Loans
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