How Open Banking speeds up the loan application process

Applying for a loan should be straightforward, but sometimes gathering and submitting paperwork adds unnecessary stress and delays.

Lenders are legally required to make sure your loan is affordable. To do this they will want to check your income and expenditure. Traditionally this has meant sending in paper bank statements.

Open Banking is a secure way to share your financial information directly with trusted and authorised lenders, and offers an easy solution that simplifies the application process.

Whether you’re applying for a loan through a high street bank, an online lender, or your local credit union, Open Banking can help make the process faster and easier.

How does Open Banking work?

Open Banking allows you to safely share your bank transaction data directly with approved lenders (like banks and credit unions), with just a few clicks.

This secure service lets you give permission for a lender to view essential financial information, like income and regular expenses, without having to dig up and submit bank statements.

Reducing the hassle of paperwork

When applying for a loan, applicants typically need to submit recent bank statements (usually around 3 months’ worth) to prove their income and spending patterns. This can mean:

• Locating the right documents in your online banking app
• Downloading, scanning, or printing statements
• Manually emailing or uploading these files to the lender

This process can add days to a loan application, potentially delaying access to funds.

The beauty of open banking is that it can speed up the loan application process. Instead of scanning, printing, and emailing bank statements, you can securely connect your bank account to the lender. As lenders can now access your financial information directly, they can make faster decisions. This can reduce waiting time from days to potentially hours.

How credit unions are using Open Banking

Credit unions on the NestEgg platform use Open Banking to streamline loan applications. This makes it easier for members to provide necessary financial data, meaning faster responses and less paperwork. By using open banking, credit unions can often approve loans quicker, helping their members avoid high-interest alternatives and stay financially secure.

The choice is yours, but why wait?

The next time you’re thinking about a loan, consider opting in to open banking. It could save you valuable time and help you get a quick decision, without the hassle of extra paperwork.