GPS Changing The Way Banks Loan
Having a system in place that allows both consumers and businesses to have access to large amounts of additional cash flow is one of the things that reinforce capitalism’s greatness. Through channels of credit, teenagers are able to purchase automobiles to drive to school and work, families are able to purchase homes and companies are able to acquire the additional capital to increase staff and boost profit. However, after many banks and creditors began extending loans to high-risk borrowers in an attempt to make money on a booming real estate market, the bubble burst. What resulted next was the catalyst of the housing crisis, financial crisis and recession that has caused havoc on many people’s lives. All Americans are now paying the price for the mismanagement and failure of oversight by lending companies, but many of the rules associated with lending may continue to change. One of the changes that some banks are considering is to use GPS vehicle tracking as part of the loan process.
The Lending Process
Every bank, lender or creditor has a different set of rules they observe to determine whether an individual or business is worthy of lines of credit or a loan. Financial institutions will look at personal income documentation, household income, alimony/ child support payments, credit score and more. Financial and lending institutions factor all this information to see how likely an individual or business is of repaying a loan in a timely and responsible time frame.
How Banks Could Utilize Monitoring Technology
Banks and lending institutions are always looking for ways to improve the lending process. Sometimes new regulations and accountability help the credit market, and other times they can have a negative impact. One of the new tools some banks are considering employing to the lending process are GPS trackers.
GPS tracking devices store and transmit position and location-based data, along with a number of other great features such as speed alerts and geo-fence alerts. A bank or third party, remotely via web-based application, can view recorded or real-time monitoring data to observe for a number of different factors that could determine if a person was a high-risk or low-risk motorist.. How banks could use the personal GPS tracking technology is by offering individuals or companies lower interest rates on automobile loans if the borrower agrees to equip the automobile for which they got a loan for with a fleet management car monitoring solution The data could then be used to ensure the borrower is working consistently, or not engaging in driving practices such as speeding that can increase the probability of being involved in a serious automobile accident.
The bank’s GPS surveillance solution could also be utilized to recover the automobile(s) if loan payments are consistently late or borrower goes into default. This form of auto-recovery is currently employed by a number of car dealerships that provide loans to car buyers.
Opinion On GPS Tracking Systems
Would you agree to have a real-time tracking unit placed on your vehicle if it meant you would receive a lower auto insurance rate?
If it ever became mandatory that loans were accompanied with the use of GPS tracking technology, do you think that the lending institution(s) would you personal information for other things?
Ryan is a freelance writer who is passionate about technology, music, photography, and decentralized finance.