Canadians are increasingly viewing alternative lenders as viable options to traditional financial institutions.
However, while many will look at alternatives for short-term (payday) loans, when it comes to arranging a mortgage traditional lenders are the first choice for most (60%) according to a new report from Smarter Loans.
The State of Alternative Lending in Canada 2018 reports that 67% of survey respondents had sought an instalment cash loan from an alt lender in the past 12 months, 61% looked for payday loans, 18% auto loans, less than 3% had sought a mortgage, and less than 2% were looking for a home equity loan.
Four in ten seeking a home equity loan went to a traditional lender first and were most likely to spend 10 hours of more doing research before applying (20%), narrowly beating those seeking a mortgage (18%).
Satisfaction lags for home equity loans
Respondents who had looked for a home equity loan were among the least satisfied with the application process among alternative lender customers and 40% said they would not recommend them to others.
Among customers’ priorities, those arranging home equity loans and mortgages were most concerned about the speed of receiving the loan.
Generally, older respondents were more likely to prefer traditional financial institutions.
Overall, 43% of those who had used an alternative lender would consider going back to a bank while 38% were unsure.