This is a part of our series devoted to TurnKey Consumer, the ultimate consumer lending automation platform. Here are the parts of this series
And so, let’s begin the Part III.
Personal loans, credit cards/lines, BNPL, mortgages, peer-to-peer, and all other types of consumer finance are seeing a sharp rise in demand in recent years.
Partly due to the economic climate in the world. But mostly because credit is becoming cheaper, easier to obtain, more flexible to repay and less stressful for consumers to use – thanks to rapid development of lending technology. [download]
Consumer lending platforms like TurnKey Lender levelled the playing field and democratized credit, increasing the competition in the lending market through affordable, intelligent, and configurable lending automation.
Advances in credit scoring and decision-making allow lenders to reach wider audiences and approve more of the better loans on auto pilot where it would’ve taken a traditional brick-and-mortar lender weeks.
But in the midst of a technological revolution in the lending industry, one may think that the streets of all consumer finance industries are paved with gold waiting to be harvested.
Which isn’t necessarily the case and borrowers most often are looking for credit in certain places and on specific terms. Today we share the types of consumer lending businesses that we see get the best response from the market and grow the fastest using TurnKey Consumer platform.
1.Unsecured personal loans as the ultimate consumer finance tool
Closed-end, uncollateralized financing for a small- to mid-size individual need is called a personal loan, a.k.a. consumer loan. The multipurpose personal finance industry is expected to continue growing in the next 10 years due to increasing consumer demand for more customised and tailored financial services.
The demand for personal financial services has been influenced by advances in flexible automation, meaningful use of big data and artificial intelligence, and mobile banking, that have made it easier for hundreds of millions new people to access credit and other financial services in the nearest years.
Despite the advent of the embedded finance age, the traditional unsecured, consumer loans with a variety of terms, fees, models, and peculiarities will continue to be the go-to credit choice for individuals investing in something or facing emergency.
- Using AI to outperform competition in consumer lending space
- Consumer lender now competes effectively against the big banks
However, personal finance is an umbrella term that has many promising subcategories and branches that house millions of striving businesses.
2. The old and new forms of micro/payday loans
The global microfinance usage is expected to continue to trend up at a CAGR of 10.8% reaching $496.90 billion by 2030. What’s interesting is that lenders continue to innovate and offer new credit models. For example, Earned Wage Advance.
Here is a success story of a startup using TurnKey Lender to reach 100k active customers in the first several months with this offering.
And here’s a success story about one of TurnKey Lender’s micro lending clients.
Embedded lending taking over low-risk credit across industries
Consumers cite these as the reasons for why they use BNPL instead of credit cards
- It’s easier to make payments – 45%
- There’s more flexibility – 44%
- Lower interest rates – 36%
- Easy approval process – 33%
- No need to pay interest – 22%
And even if you look at it simplistically, it makes a lot of sense that credit should occur at the point of sale. But in our work, we often see that for some product and service providers it is more beneficial to partner with a lender to offer their clients flexible financing and not have to deal with loan management and reporting.
Here are some exciting examples of successful embedded consumer finance projects made with TurnKey Lender:
- Intelligent end-to-end embedded lending automation for a retail business
- Medical procedure financing delivered 7-figure growth
- Financing franchisees in-house with one-stop lending automation
3. Lines of credit as a retention tool and more
Lines of credit as well as other lending offerings have gone digital and become simple both for the borrower and the lender. Lines of credit serve as a perfect tool to connect a borrower to your business long-term.
Customers can use a line of credit to securely access and quickly receive funds without the lengthy paperwork and long wait times that come with traditional lending institutions.
This type of loan offers borrowers the flexibility to borrow, repay and re-borrow as needed up to their credit limit. Additionally, borrowers can enjoy lower interest rates and fees than those associated with other forms of consumer finance.
4. Peer-to-peer consumer finance as a new stage of credit democratization
The peer-to-peer lending industry has been growing steadily since its inception in 2005, with marketplaces like LendingClub and Prosper leading the charge.
Over the past decade, the global peer-to-peer industry has seen immense growth, with small to mid-size lenders coming to the market and targeting specific audiences with unique needs. In the US alone, the industry has grown from a few million dollars in the early 2000s to $804.2 billion by 2030 growing at a CAGR of 29.1%.
With technology like TurnKey Lender, peer-to-peer lending with fully ready investor and borrower modules included is ready to use out of the box.
5. Secured loans like in the big leagues
When working with new scoring methods or borrower groups without a reliable credit history, lenders often look to offering secured loans as a win-win option for the customer.
People typically get secured collateralized loans for larger purchases, such as buying a car, purchasing real estate, or starting a business.
They are often used by borrowers who may not qualify for an unsecured loan due to having a poor credit score or limited credit history. These borrowers, for example, can obtain consumer loans secured with a car, saving account, or house.
Lenders take on less risk with these deals, so they typically require lower interest rates and shorter repayment periods than unsecured loans.
6. Using the power of credit for good with non-profit consumer lending
More than 25% of TurnKey Lender clients are non-profits that use our platform to extend finance to inidividuals, business owners, refugees, asylum seekers, students, and other people in need of zero-interest financing.
There’s a lot of money in the world that governments and institutions are looking to use to support others through lenders who’d be able to administer it. This could just as well have be you.
7. Automated consumer leasing is just as easy
Leasing is an important credit product in the global lending market. It provides access to capital and equipment for those looking to acquire an asset, vehicle or equipment. Leasing also enables businesses to acquire assets over time and manage potential cashflow consequences, allowing them to benefit from the asset’s use in the short-term, while spreading out payments over the long-term. This makes leasing a highly attractive credit product for many businesses and has helped to fuel global economic growth.
8. Telecom airtime finance – instant credit accessible from anywhere
With direct access to tens of millions of cell phone users and vast amounts of unique historic and real-time data that can be used for borrower evaluation, telecom providers are a great candidate for successful and effective embedded finance implementation. Offering credit products through a dedicated provider’s mobile app, a regional superapp or even through simple USSD codes allows vast audiences who were previously unbanked or underbanked to gain access to affordable and easy to use credit. TurnKey Lender customers extend instant airtime/personal/micro loans to millions upon millions of their telco clients.
Why choose TurnKey Lender over any other lending platform or solution
We’ve already gone over most of these points, so we won’t spend any more of your time than needed. Here’s why businesses worldwide choose TurnKey Consumer as their lending automation provider and a long-term tech partner.
- A proven and extensive track record in 50+ countries. Our platform is used by the companies who rely on meaningful innovation as a competitive edge to outperform everyone else on their respective markets.
- TurnKey Lender has dedicated automation options for small to mid-size businesses and enterpise-level clients which ensures everyone gets the speed and configuration options they need.
- TurnKey Consumer is an established platform currently used by lenders globally to extend credit to 50+ millions of borrowers as of 2023.
- All other solutions present on the market offer significantly less configuration freedom
- We don’t limit business owners where competitors do. We allow them flexibility (e.g. # of backoffice users, white labeling, etc)
- You are charged fairly and transparently inline with competitors where you are bombarded by hidden fees, addons and upsells.
- No other solution automates all parts of the lending process to this extent within one intuitive solution.
- We also offer meaningful API for integrating with your front-end and other solutions
- Pre-configured integrations which take other providers weeks if not months (payment provider, credit bureau, SMS, email, etc.)
- Meaningful use of AI in scoring, decisioning and collection. We provide unmatched credit decisioning accuracy and the lender controls all the credit scoring criteria and decision rules.
Consumer finance automation is becoming increasingly easier due to advances in technology and data-driven processes. With the emergence of the cloud, access to real-time data, smooth integrations and meaningful use of artificial intelligence, lenders can automate the entire loan process from origination to repayment and well beyond. Consumers dictate what their credit will look like and they demand better experience and terms, instant decisions, reduced time and costs associated with getting a loan. This creates a great opportunity for lenders to enter the consumer lending market in any of the 10 verticals we’ve went over. TurnKey Lender will be happy to be the reliable shoulder you can put the weight of digital lending automation on.
Start your TurnKey Consumer journey today.