Moving The Personal Loan Market Upward Through Fintech

Most people around the globe look into taking out a loan for different intents. Some loan for business startup or operation costs, some for educational purposes, for paying off debts, or for other personal use. At times, people take out a loan because of insufficient funds to settle expenditures that are unforeseen. The American Pride Legal Funding, for instance, offer loans for vehicular accident settlement. People do find such loans quite beneficial.

In fact, the market on personal loans has attained a record high in 2018, as the promising industry of financial technology has made financial services through mobile apps more convenient and accessible to consumers.

The Growing Fintech Companies 

As per data by TransUnion and reported on CNBC, the market on personal loan has gone up to 138 billion US dollars in 2018, an increase of 17% year over year. Lending through fintech comprises 38% of personal loans altogether, an increase from only 5% in 2013. This indicates that fintech companies are growing.

By means of making use of innovative techs, companies of fintech are providing modified or tailored products that are low-cost, which brings about a considerable bearing on the increasing expectations of customers, together with the intensifying pressure on firms that are traditional.

The Department of Treasury of the United States issued a report in July wherein it states that over 3,300 companies of fintech began from 2010 to 2018 wherein investments in these fintech startups are speedily growing. Fintech companies’ worldwide investments in 2017 arrive at 22 billion US dollars. Fintech companies are the major mover of the growth of the market of personal loan.

Debt in the American Household

Many Americans are buried in debt, with increasingly more individuals incapable of settling them. Debt on student loan in 2018 arrived at a new high of 1.5 trillion US dollars; next to it is debt on auto loan at 1.1 trillion US dollars, and debt on credit card at 977 billion US dollars. As per Forbes, the average sum of debt that an American household has is 133,568 US dollars.

For individuals borrowing loans that are subprime, either due to poor credit score/history or low-income, the dangers are the greatest in the event of an economic crisis or collapse. As reported by TransUnion, these borrowers, who put their occupations or work hours on the line is likewise rising rapidly at 4.3% year over year.

Technology-based Solutions

The high utilization of mobile devices as well as solutions that are technology-based is driving the need for banking and financial solutions, wherein personal mobile devices are used to access such solutions. Because of this, financial institutions and companies are greatly capitalizing in solutions that are technology-based to measure up with modern companies of fintech.

A vast majority of worldwide banks, investment managers, as well as insurers are intending to collaborate and partner with companies of fintech through the next three to five years, and are expecting to have an average of 20% ROI on their ventures.

Plus Token Sold Off $3 Billion-Worth Digital Money Placed by 10 Million Cryptocurrency Owners

Plus Token, a blockchain based mobile wallet company operated by Chinese nationals was able to entice about 10 million cryptocurrency users to store their digital money in the company, by promising them high yields of interests. Although blockchain reviewers voiced doubts about Plus Token as a legit cryptocurrency operator, the ewallet site was able to gain the trust of cryptocurrency users, which numbered to as many as 10 million Plus Token members by July 2019.

Unknown to the millions of members, Plus Token was into a Ponzi-like scheme of paying dividends using digital money coming from new cryptocurrency investors.However in July of this year, Primitive Ventures, another blockchain-based company owned by Dovey Wan took notice of the ongoing mass sell-off being carried out by the fraudulent Chinese company.

Ms. Wan alerted players in the cryptocurrency ecosystem by sending out tweets about the Plus Token mass sell-offs. She called on other cryptocurrency exchange operators to blacklist the company. According to Ms. Wan, Plus Token still has control of a large amount of cryptocurrency which it still intends to dump and launder using various digital wallets linked to Plus Token.

In order to hasten preventive actions, Ms. Wan attached investigative data gathered by Peckshield, a security audit firm and the e-wallet addresses associated with Plus Token. The Peckshield report showed how real money flowed from PlusToken to the questionabl e-wallets early in July, the same time when Plus Token started dumping the digital money entrusted to the company by millions of cryptocurrency owners.

In a recent oped written by Ms. Wan for Coingraph, she reported that Chinese authorities have already hunted down the core team running the Plus Token cryptocurrency Ponzi scheme. Six of the Plus Token Chinese nationals were extradited to mainland China by Vanuatu, an island country located in the South Pacific.

Crypto Analytics Firm Explains How Plus Token Navigated the Sell-Off

London-based crypto-analytic firm Token Analyst said Plus Token did not sell off cryptocurrencies directly to exchange and trading sites. Instead, the fraudulent company used online mixing services to obscure the origins of the blockchain transactions, before they eventually reached the e-wallet addresses owned by Plus Token.

What Do Online Mixing Services Do in the Cryptocurrency System?

Although using cryptocurrencies allows users to hide their identity when using digital money for peer-to-peer and other online transactions, there is still a database in which comprehensive information about cryptocurrency transactions are stored. Keep in mind that cryptocurrency transactions require the real identity of the owner, but are kept confidential when recorded as blockchain entries through the use of key codes.

Each movement of a specific amount of cryptocurrency, indicates all keycodes involved in a chain of cryptocurrency encryptions that recorded the transfers of digital money. Anyone who would be interested in knowing the true identity of a cryptocurrency source can simply trace it through the related blockchain database.

This is where online mixing services play an important role. The services they offer involve mixing their customer’s cryptocurrency funds with cryptocurrency funds owned by other people. That way, the trail leading back to the original owner of the digital money will be obscured.

What To Do Following Rejected Personal Loan Application

Are you feeling hopeless because your lender says you are not qualified for a personal loan? If you are going to stop trying when you are refused for a personal loan, don’t give up. While it may appear that all hope is lost, the truth is that there are other loan companies willing to offer you a loan.

Listed below are essential steps to follow if rejected for a traditional personal loan.

Find out the reasons why you are declined of a loan

When a lender rejects your loan application, know that the Fair Credit Reporting Act requires that the lending company inform the borrower of the reasons for the rejection through snail mail or email. The correspondence should explain the reasons why you ended up declined. Reasons for refusal may include the following:

• credit rating doesn’t match the lender’s requirements.

• credit track record is limited – Should you have lower than 3 years of credit history, it can be tough for several loan companies to give you a financial loan.

• too high debt-to-income ratio – When a good portion of your cash flow is linked with having to pay other loan products, your application to borrow money could be refused.

• late payments – If another lender reports you of late payments, lending companies may unlikely offer you a loan.

Whatever the reason you are denied a loan, the data you get could be among your best resources. You could start dealing with them prior to obtaining your future personal loan. This allows you to strengthen your weak points such as your credit history or debt-income ratio.

Subscribe to credit tracking programs

When a loan company provides a certain reason for the loan rejection, it is strongly advised to ensure there are no other problems with your credit rating or history of credit that may become worse when you are applying for a loan again. A credit monitoring program can assist you on this. They are going to browse through your credit track record from the point of view of the lender. They are going to clarify what you need to do to improve and when you can apply for the loan again.

Develop a plan

Once you know what issues you need to tackle, create a plan to determine what you need to do and how to do it. There is no precise way to do this because your plan will depend on the issues you need to address and your overall financial situation.

Knowing the condition you need to fix, plan on the actions you need make, when to do it and how to implement it. There isn’t any conclusive approach to get this done as your plan is determined by the condition you have to fix along with your general financial circumstances.

Have patience

With respect to the credit concerns you are facing, it may take some considerable time to fix everything that’s off on your credit standing. So you ought not to make unrealistic targets and also have high anticipations as repairing credit is not a quick fix scheme.

Give yourself sufficient time to develop a very good credit file, monitor your credit rating on a regular basis to find out how your steps affect your rating.

Look for other alternative lending institutions

As soon as you reach the stage where you are feeling comfortable about applying for a loan again, look around for other personal loan offers to determine your chances of getting an approval. Assess the fees, discount rates, as well as other charges every single lender presents. The majority of loan companies will let you have a look at their fees, rates and soft assessment whether you qualify.

Bottom line

If you follow the steps above, you will improve your chances of getting approved for any personal loan, from quick cash loans to long-term loans. You’ll also increase your options of getting approved for other credit at reasonable rates, which can save you money on interest.

You will get to improve your credit standing and qualify for the next loan if you follow the tips outlined above. So if you were denied a loan today, it’s not really the end of the world. There is hope and the information you get is your tool to help you improve.