More Consumers Are Filling Out Loan Applications Digitally
Seeing someone schlep across town to ask a banker for a loan is more likely a scene from an old movie than something you’d encounter today, a new survey shows. Consumers are increasingly turning to their mobile devices to apply for a loan.
Fiserv, a financial services technology solutions company, sought to learn how consumers prefer to apply for money. It commissioned The Harris Poll, a public opinion research firm, to interview 3,050 adults who live in a household that has a checking account that has been used to pay a bill or make a purchase in the past 30 days. It found that human interaction may be overrated, as many preferred to connect with lenders through digital technology.
Nearly two-thirds of consumers (65%) who had recently applied for a loan said they had used a computer or mobile device to complete some or all of the application. That percentage has grown since last year, when 56% of consumers used a computer or mobile device during their loan application process.
When it comes to applying for mortgages, 71% of respondents said they were “somewhat or very comfortable” with the notion of completing the loan online, which represents an increase from 67% in 2018. Among mortgage applicants, 41% said they were comfortable with the idea of using mobile applications, up from 29% a year ago.
Consumers did have varying responses about how much of the loan process they had completed online. When it comes to home loans, 19% of respondents said they had read loan documents on a mobile phone or tablet, 16% had uploaded documents requested by the lender via a mobile device and 21% said they had received a loan decision via their mobile device.
While interest in mobile lending is clearly on the rise, not everyone is on board. The biggest barriers keeping some consumers from hopping on the mobile-lending bandwagon are screen size (56%) and security concerns (51%).
When respondents who said they were unlikely to complete a loan application via a tablet or smartphone were asked if anything could change their minds, some said they might reconsider. In fact, 22% said improved online security might cause them to give it a try. Seventeen percent said having the ability to interact with a human online would lead them to reconsider and 16% said they would possibly change their mind if they could easily switch from filling out the application online to finishing the application with a person.
The ability to apply for a loan online via your mobile device or computer can make the process more convenient and less intimidating. However, you should still take time to consider whether taking out a loan is the best move for you. After all, applying for a loan can affect your credit score for years to come. If you’d prefer to be able to apply for a mortgage or other type of loan via your computer or smartphone, look for a lender that offers that capability.
