Membership has its benefits
In another indication that online banking is gaining force, Beneficial National Bank is offering CompuServe members loans online.
Beneficial is one of the first online banks to offer customers instant loans. CompuServe members can get to get unsecured personal loans for up to $10,000--all under two minutes and without having to pick up a telephone.
While Beneficial is leading the way, it is not the first to offer online loans. Bayshore Trust, a Canadian bank, for instance, also offers instant online loans.
The move highlights CompuServe's push to focus itself on the business market and Beneficial's expansion into the online banking market. The company plans to deliver the same service on the Internet, according to Robert Wade, a spokesman for Beneficial.
"Beneficial is doing this because there is a completely new area of customer service out there," Wade said. "There's a new customer; they want interactivity in electronic means. They want to be able to do their banking, shopping, and information gathering with the speed, ease, and convenience of touching a few buttons on their home PC."
A CompuServe member interested in securing a loan goes to the right area online and fills out an online loan application. An automated credit check is performed, and within two minutes, the member is told if he or she is approved and is then given the loan's interest rate. At that point, if the member accepts the loan, Beneficial mails out the check the next day.
Interest rates range from 9.9 percent to 19.5 percent, depending on the person's credit rating. Although these rates may seem high, the rates for unsecured loans run higher than those for secured loans. Wade said rates on and offline are the same.
The project has already met with success during a test on CompuServe, according to Beneficial. It also fits in well with CompuServe's strategy to become the online source for businesses, said Gail Whitcomb, a spokeswoman for CompuServe. The nation's second-largest online service, which nixed its consumer-oriented Wow offering, will be rolling out CompuServe for Business at the end of January.
Banks, Whitcomb said, are high on the list of strategic partners with which it plans to partner when it launches the new service. "We're hoping to have more banks. We have been talking to a half-dozen banks for at least three or four months."