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Top Drivers of Non-Traditional Installment Borrowing:

Top Drivers of Non-Traditional Installment Borrowing by Consumers with Credit Cards:

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Data for today’s episode is provided by Mercator Advisory Group’s Report: Installment Lending: Fintechs Gaining Ground on Loans Forecast at $212 Billion

Top Drivers of Non-Traditional Installment Borrowing by Consumers with Credit Cards:

  • 309 surveyed loanees took out an online loan because it offered a better and more convenient experience than going to a bank.
  • 285 surveyed loanees took out an online loan because it offered more attractive loan terms than a bank.
  • 259 surveyed loanees took out an online loan because it offered lower interest rates than a bank.
  • 231 surveyed loanees took out an online loan because they were turned down from their bank.
  • 209 surveyed loanees took out an online loan because they thought online lenders were more likely to approve their loan than a bank.
  • 166 surveyed loanees took out an online loan because it was faster to get approval from them than from a bank.
  • 56 surveyed loanees took out an online loan because their bank didn’t offer the type of loan they needed.

About Report

Mercator Advisory Group released a report on trends in installment lending titled Installment Lending: Fintechs Gaining Ground on Loans Forecast at $212 Billion. The research explains the state of consumer installment lending in the United States and how fintechs and finance companies now outpace banks and credit unions in installment loans. Furthermore, this research examines how companies are offering embedded finance products such as CCaaS to allow customers the ability to offer their own credit card product. By way of four evaluative criteria, general advice is provided for those seeking a relationship with a fintech provider.

“Banks used to dominate consumer lending, with installment lending products priced far lower than credit cards, but that is no longer the case,” comments Brian Riley, Director of the Credit practice at Mercator Advisory Group, and the author of the research report. “Buy Now, Pay Later (BNPL) was a wake-up call to credit card issuers. BNPL was a recast of a merchant finance model used long ago 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,” Riley says.