Jan 26, 2020 | Updated: 03:54 PM EST

Tech Takes the Borrowing Experience to New Speeds

Jan 15, 2020 03:54 PM EST

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Tech Takes the Borrowing Experience to New Speeds
(Photo : Tech Takes the Borrowing Experience to New Speeds)

For centuries, there was only one way to borrow money. If you needed a personal line of credit even just 10 years ago, you would walk through the doors of a brick-and-mortar financial institution and ask the teller for help.

A physical branch still offers a wide array of products today, including a line of credit. But as financial institutions close their doors in record numbers, they're no longer the most convenient option in an increasingly digital world.

What Are Online Line of Credit Loans?

Historically, if you wanted a line of credit, you would have to visit a bank, sit through an in-person meeting, and wait for the loan specialist to review and approve your application.

The biggest difference now is the powerful tech that stands behind these borrowing options. Financial institutions can automate many of the steps mentioned above.

As a result, everything changes, from the speed of your application to the time it takes you to receive your line of credit limit.

Quick approval means you may know if you qualify in a few minutes. You may even receive your funds within a business day.

In contrast - you may have to wait a long time for someone in-branch to review your application; you may even have to go in for an appointment. 

How to Borrow an Online Line of Credit

At the core of it, borrowing online is the same as in-person. Strip the process down to its fundamentals, and you have two things: a borrower and a financial institution. The borrower has to prove to their financial institution they're good for the money.

You'll do this by providing personal and financial information to your financial institution of choice. They may look at your credit history, job, and debt-to-income ratio to see if you have the means to pay back your loan.

Of course, how you supply this information is totally different from an in-branch option. Rather than opening a door to speak with a credit specialist, you'll open a new tab to get started.

If you have everything handy, the process shouldn't take you more than a few minutes.

Keep Your Personal Information Safe

By now, you should know well enough your personal information is a hot commodity. It serves as the key to your financial identity. In the wrong hands, your personal information allows someone to access your accounts to commit fraud. More still, they may be able to open a personal loan or line of credit under your name.

Protecting this information is crucial, especially as you turn to online line of credit options. You need to make sure you're sharing it safely to prevent identity theft.

Here are some ways to keep your data secure:

  • Find out how your financial institution plans to collect, use, share, and store your information.
  • Look for a closed padlock to the left of the URL. This lock implies your connection is secure and the site has the appropriate security licenses.
  • Be aware of scams. Fraudsters will try to intimidate you into sharing data over the phone or email.
  • Create a strong, unique password for each financial account.
  • Share your data only when absolutely necessary.

The Bottom Line

When disaster strikes, timing is crucial. You can't put off an unexpected emergency bill, you have to act fast.

Thanks to digital processes that automate much of the borrowing experience, online line of credit loans may work on the kind of timeline you need.

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