Actually for most people, their loans originate outside the traditional banking system.
The three biggest personal loans are mortgage, car and credit card.
More than half the mortgages are through FinTech, most car companies have their own financing arm and most credit card companies are on their own (years ago many were backed by GE..not sure these days).
In the US, what is called the "shadow banking" system is huge.
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you guys are pretty strange I must admit, in Europe if you want a loan you work with a bank, simple as that
FinTech kicked the banks ass because they were technology averse. The mortgage industry was turned upside down when companies like Quicken started to take hold. They took applications online, gave instant approval/denial, and charged much lower fees.
The banks sat back and still required people to come into their branch, fill out paperwork, and wait a few days for approval.
It is also why DeFi is going to hurt the banks more. People who have assets, ie crypto, can get a loan in a few seconds. Even the wealthy have to fill out paperwork and wait for their bank's approval.
Simply put, there was a better solution which meant the banks were stuck.
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Ohh I understand now, I never took a loan so I only know what it's like from friends and family, didn't realize there where other ways to go about it
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