Online Loan Lenders Prepare For Holiday Shopping Blitz
The 2021 holiday season is just around the corner and that means big business for retail stores and online shopping. Historically, consumers have financed a large portion of their purchases through credit cards and online loans.
With the uncertain state of global markets, many consumers are opting to take out personal or unsecured loans versus overusing their credit cards this year.
Online loans are likely to be one of the fastest growing markets in 2021 as online loans now make up 5% of all loans.
Loan companies are preparing for this now by extending more loans to potential borrowers with less than perfect credit scores.
Credit scores are expected to drop again due to current economic factors, leaving many consumers unable to obtain loans through traditional means. One-third of states have passed legislation that allows lenders to approve loans even if there is a mark on the applicant’s credit score. This has helped boost approval rates for personal loans among these types of lenders, at least according to recent market surveys.
A recent survey found that approximately half of survey respondents said they prefer their holiday purchases over other discretionary purchases because loans are more readily available online or to find an alternative method of financing.
The loans are easily accessible through the web, making it easier for consumers to shop anywhere at any time they choose to.
Another company that expects to see growth is online retailer Ebates which offers cashback rewards on purchases made through their website. Ebates credits shoppers with rebate checks twice a year if their account balance reaches $25 or higher, giving them funds for future purchases. They also offer other incentives such as birthday discounts and free shipping vouchers based on customer spending habits throughout the year. With so much competition in traditional retail stores this year, online loans are expected to be one of the best ways for individuals to finance their holiday shopping.
The state of global markets has negatively affected personal loans. Consumers are seeking alternative methods to fund their purchases this holiday season due to the high demand for loans. This has led consumers to look towards loans as a viable option when it comes to funding their purchase decisions this holiday season rather than using credit cards or other less traditional forms of financing. Now that loans have become more readily available, consumers are opting to take out loans online which gives them access to all retailers at their disposal. Online lenders are expecting an increase in volume during this time as well so they can prepare by providing more loans with increased approval rates regardless of credit.