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

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Data for today’s episode is provided by the Mercator Advisory Group report: Installment Loans: Fintechs Gain Ground on $212 Billion Loan Forecast

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

• 309 respondents took out a loan online because it offered a better and more convenient experience than going to a bank.
• 285 borrowers surveyed took out a loan online because it offered better loan conditions than a bank.
• 259 borrowers surveyed took out a loan online because it offered lower interest rates than a bank.
• 231 borrowers surveyed took out a loan online because their bank had refused.
• 209 respondents took out a loan online because they thought online lenders were more likely to approve their loan than a bank.
• 166 borrowers surveyed took out a loan online because it was faster to get their approval than from a bank.
• 56 borrowers surveyed took out a loan online because their bank did not offer the type of loan they needed.

About the report

Mercator Advisory Group has released a report on installment loan trends titled Installment Loans: Fintechs Gain Ground on $212 Billion Loan Forecast. The research explains the state of consumer installment loans in the United States and how fintechs and financial companies are now overtaking banks and credit unions when it comes to installment loans. Additionally, this research examines how companies are offering integrated 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 loan products priced well below credit cards, but that’s no longer the case,” he said. Brian Riley, Director of Credit Practice at Mercator Advisory Group, and the author of the research report. “Buy Now, Pay Later (BNPL) has been a wake-up call for credit card issuers. BNPL was a revamp 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,” says Riley.