U.S. Lending Companies
It's true the United States and its borrowers already have access to basic financial services. So how will microfinancing services help U.S. investors and borrowers? For the first time in history, the online peer lending financial businesses are growing faster than the long-established banking industry. This growth isn't going unnoticed. More individual investors are joining microfinancial lending companies. However, the microfinance industry is fairly unfamiliar. Typically, U.S lending companies and investors prefer to try new financial ventures within the United States before expanding an investment model overseas. The current leading microloans are motorcycle loans, military loans, and wedding loans. IMFM explores why these three types of loans are quickly becoming so popular and which U.S. companies are dominating the market.
The market for new and used motorcycles in the US has seen lots of recent innovation due to marketplace lending. Borrowers can now get a motorcycle loan to purchase a motorcycle of any make or model from any private seller or dealer. The borrowing process is done completely online, without having to visit a physical bank branch. In only minutes, potential borrowers can connect to online U.S. lenders and apply for an unsecured motorcycle loan from any mobile device, tablet, or computer. They can be riding their new motorcycle on the highway by the weekend.
Active duty military members can receive orders for relocation to another military base or for a 12 month deployment overseas. In any case, the life of an active duty service member and their family can be abrupt and uncontrollable. A military loan can provide financing to any U.S. armed forces member to cover any type of expense. From anywhere in the world, an active duty military member or a family member can apply for a military loan online. Plus, veterans can qualify for a small business loan, VA home loan, and other personal loan services.
After the most recent stock market crash in 2008, U.S. consumers have been more conservative shoppers. Instead of applying for high limit credit cards that may include hefty missed payment charges or annual fees, borrowers are trying a new financial alternative. A short term loan gives a borrower fast cash to finance anything from basic monthly expenses to an urgent medical visit. These loans can provide money to borrowers in a few days and have some of the most competitive interest rates on the market. Plus, when a loan's funds are allocated to pay for one purpose, the borrower is less likely to overspend and overextend their finances. Applying for a short term loan can be a convenient way for preserving a borrower's financial situation and keeping them out of debt.
In the U.S. where everything is larger than life, a wedding is no exception. The cost of a wedding can be overwhelming to many newlyweds. Borrowers can use a wedding loan to pay for any wedding expense, including hiring a DJ, getting a 3 tier wedding cake, buying the perfect wedding dress, reserving the ideal venue, or planning a week long honeymoon. Couples can access financial services including an online application and the ability to check their rate before committing to a loan. The money they need to start planning a wedding is at their fingertips!
The average US household with credit card debt has an outstanding balance of $15,779, with an average interest rate of 13.66%. If steps are not taken to pay down this debt, outstanding balances will continue to grow. Many Americans are taking out consolidation loans to pay off their credit card debt. When consolidating debt, it is important that the consolidation loan has a lower interest rate than the average interest rate of the debt being consolidated. Progress is being made in the online lending market and debt consolidation loans are now available with interest rates significantly lower than the US average credit card rate of 13.66%.