Regulated loan is one that is given to a consumer for his own use. It is regulated to ensure the borrower is taking loan on just terms and conditions and there are no violation of his right or terms and conditions. While on the other hand, when someone takes a loan for business purpose, this in an unregulated loan.
It is easy when you are taking a personal loan for yourself, you can easily apply for an online loan and you get the money. With the ease of application procedure and increasing demand for online loans, some old fashioned brick and mortar companies are going for online lending system. But when one is going to apply for a business loan, they face difficulty in terms of terms and conditions because not one but many agencies are authorized to oversee the loans given for business purpose. Even for online loans Texas, there are more than regulatory authorities.
While making regulations, authorities must not ignore the aspect of online lending. Laws should me made such that they not only take into account the conventional loaning but also online loaning system.
It is necessary for authority who regulates loans to design policies that compel lenders to explicitly mention the terms and conditions of the loans so that borrowers can decide which option is best for them. It is very important that all the terms and conditions are crystal clear for better decision making.
New online lenders and banks should make partnerships to allow borrowers new options for loans. With such partnerships, every borrower will be able to get loans from somewhere even those who are not able to get loans from banks.
Smalls lenders add additional costs to the loans making them very expensive for the borrowers. As they are not regulated b any authority so they are not bound to disclose these costs. Some regulations should be made who can have an oversight on these lenders as these lenders earn a lot from the borrowers who have less credit scores.
Different regulations are in place to create a workable environment between the lender and borrower. Mortgage disclosure is one of the regulations that makes it compulsory for the lender to mention all the facts including interest rates and other costs associated with the loan so that borrower can access all the available options and go for the best one.
Similarly, there is a regulation that ensures that no company received any reward to promote certain specific lending companies.
There are some agencies where lenders can file their complaints in case they have issue with the lending parties so that their case will be investigated and they are provided with the solution if the lending party has done any violation of the regulations.