There are times when life can take us by surprise. An emergency arises that can derail your budget completely. An opportunity presents itself that is too good to pass by. It is in these cases when storefront lenders can serve as lifesavers.
If there’s a common misconception about finances that a lot of us struggle with, it’s this: that credit is the enemy. It is not. When done right, credit can serve as a way for us to achieve our financial goals.
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The Charm of Credit
There are different ways to obtain credit. It comes in different forms. It can be in the form of a credit card, as a line of credit that you can tap into as needed, as a lump sum, or more depending on the loan plan that you have applied for.
They can also come from various sources. The three most commonly sought-out financial institutions are banks, online lenders, and of course, storefront lenders.
What Are Storefront Lenders?
Of these three, though, storefront lenders are probably the least popular.
They were once the only way to obtain credit aside from applying from your bank, but ever since the dawn of the digital age, their popularity had slowly dwindled until it has reached a point when there are a lot of people who are not even aware of their existence anymore.
So what are they? Storefront lenders are credit companies that are not based online. They have an actual storefront or office that you must visit in order to process your loan application, and sometimes, even pay it off.
Where to Find Storefront Lenders
Storefront lenders are everywhere, and we’re guessing there’s one near you that you probably don’t even know exists.
That is usually the case for a lot of people who are looking for this type of lending institution. It’s not only after that they have been made aware of its existence that they notice the actual office location.
You can locate them online, but it is important to note that there are a lot of them who don’t have a website yet. At most, what you’ll find are business listings.
That’s why the best way to find them is to simply ask around. The members of your community might be able to point you out towards the nearest office if there’s one.
Online Lenders vs. Storefront Lenders
We understand why storefront lenders are not as popular as they were.
After all, most of our transactions are done online these days. We have reached a point where the internet is the first point of reference we consult for anything.
Online lenders also offer a convenient way to apply for any type of loan, from payday loans to installment loans, cash advance options, and more. It’s easy to download an application form, even right now as you’re reading this, fill it out, and send it over.
Storefront lenders, on the other hand, require physical interaction. But in that factor lies the benefits of this method of borrowing.
The Benefits of Storefront Lenders
- They offer human interaction. One of the strengths of online lenders is their 24/7 engagement with their clients in the form of chat support, usually handled by chatbots to respond to basic questions. However, this is also one of their downsides as well as there are people who appreciate talking to another person especially when it’s about personal topics like money. This is the main benefit when dealing with storefront lenders. You’re always sure that you’re talking with people.
- You can get a response quickly.Since you’re talking to an actual person, you won’t need to wait for a response from a submitted online form that might not even come. You’ll get the answers to your questions immediately, during the conversation.
- You can form a bond with your lender. Dealing with an online lender can sometimes feel that you’re simply talking to software, especially with their automated email responses. They are impersonal, unlike storefront lending agents whom you can even form a personal (financial) relationship with. At the very least, you can let them understand why you’re having difficulties settling your payment if needed regardless of their response. You don’t get this opportunity as easily when dealing with online lenders.
- They are more legit. They are required to get various permits and licenses from the local government before they can start their operations. As such, you can be ensured of their legitimacy better than any online financial institution.
- They offer lower interest rates and better payment plans. Because of their legitimization, they are required to follow regulations that drive interest rates down and provide more flexible payment terms when necessary.
The Downsides of Borrowing from a Storefront Lender
Storefront lenders are not perfect, though. They have two downsides in particular:
- They are not as convenient.You’ll be required to process your application in person. Some people also find this process a bit embarrassing, especially for first-time borrowers.
- Some storefront lenders require a security deposit. This is usually in the form of a post-dated check that they can cash in, in the event that you are not able to repay your debt. We recommend checking out the requirements of the storefront lender before applying for a loan if this is required.
What You Can Expect from the Borrowing Process
Whether you’re applying for a cash advance or looking into short term loans, here are some of the things that you can expect from the process:
- The application can take a few hours to a day if the lender accommodates same-day processing.This will include filling out the application form and submitting your requirements.
- You might get your borrowed amount in cash that very day. Depending on the lender, most of them usually provide your needed amount immediately after the application process. This is a huge help for people in need of money asap, such as during health emergencies and car issues.
- You might be required to pay them directly.While more and more storefront lenders are offering various payment options (including online methods), there are still those who require direct payment to their office.
- There might be an interview involved. Some storefront lenders prefer to get to know their clients on a personal level first before approving their application. If you’re not comfortable about this, then you’ll probably fare better with an online lender.
Which Method is the Best for You?
If you simply don’t have the time to visit a storefront lender given your hectic schedule, then you will probably benefit a lot from the convenience of an online lender.
On the other hand, if you are not that adept at navigating online (which is usually the case for older borrowers), then you should definitely consider storefront lending instead. While online lenders are improving their services every day, there are still questionable elements out there posing as legitimate financial institutions only to scam people into divulging their personal financial information.
Online borrowing is also a method for those who don’t mind waiting for a response that can take up to several days depending on the institution.
On the other hand, storefront borrowing is great for those who need cash as soon as possible.
In the end, it will all boil down to your specific needs and preferences as a borrower. As we have made clear above, each method presents its own set of pros and cons.
The Future of Lending
Storefront lending might seem like a thing of the past given how digital the world already is.
We don’t think that they will completely disappear, though. In fact, it’s quite the opposite. There will only be a blurring of boundaries between online and storefront lenders.
There will be an increase of online lenders with physical offices in hopes of improving their engagement with their clients, while there will be more storefront lenders extending their services (especially their application procedures) online.
The combination of the two may even give birth to a new type of lender that we have yet to discover.
To Sum Up
There are numerous ways to borrow money when you need it. However, there are two types of financial institutions that prove popular: storefront lenders and online lenders.
Storefront lenders are financial institutions with an actual brick-and-mortar office. On the other hand, online lenders can only be reached through digital means.
Each of them has pros and cons. The biggest pro of borrowing online is the convenience it offers. It poses a question of legitimacy and lack of human interaction, though. They also offer higher interest rates and you probably won’t get the amount you need that same day.
On the other hand, storefront lenders offer human interaction, but they are not as convenient. They might also require a post-dated check as a security deposit. The good news?
Their interest rates are usually regulated by the government and are thus, lower; and they can make the amount you need available immediately.
Whichever method you choose will be up to you. We simply hope that our article has given you a better understanding of the options you have.
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