According to the Bank of America Corp., consumers can expect to get a higher approval rate if they apply for loans from banks this year. This is because investors poured in $927 million to U.S. loan funds just this week alone. Hence, the mutual funds deposit for loans went up to $3.3 billion for a 4.4% increase from last month’s percentage terms.
The Stanford & Poor’s/LSTA US Leveraged Loan 100 as well as the Bank of America Merill Lynch shows index data predicting a 15.6% gain in bonds this month. This speculation comes from last year’s index showing a 10.5% of loan returns as of December of last year. The Bank of America Corp. says that this third straight week of investors pouring money into loan funds can be attributed to the perceived need for shelter following a possible increase of interest rates.
What is the Impact of the Increase of Loan Funds to Consumers?
With the increase in loan funds, there is a higher likelihood in getting more loan applications approved. However, the requirements for loan applications through traditional banks still remain intact. This means that you will still need very good credit scores in order to be considered, and eventually approved for loans.
Another possibility that the banking system is looking at is that the influx of loan funds may cause lower interest rates. Again, you would only experience this possible advantage if you are approved of bank loans in the first place.
Online Loan Lenders Remain to be Highly Competitive
Despite the influx of loan funds coming from investors, online loan lenders remain to be highly competitive. In response to the possibility of more applications approved and a lower interest rate, online lenders conduct widespread campaigns to educate consumers as to why their services are preferred. Campaigns are done online via an application that allows several people from all around the U.S. to get together into one meeting.
Also, online lenders are widely anticipating the implementation of the Financial Services Bill. Through this bill, they get the recognition that they need from the government to encourage more entrants to the market and therefore, make their deals even more competitive. Competition, according to lenders, will ultimately bring their interest rates down as more applications pour in.
Both the traditional and nontraditional lending options reach out to American employees and other qualified applicants. It is just up to you as to which option to prefer, even your credit standing, current employment records, and collateral presented.