Traditional Lending Vs. Digital Lending

GOGOPROP
Property Guides
April 3, 2025

Traditional financing has been the go-to option for decades when buying property. It offers structured, credit-based solutions for property buyers. It typically involves working with banks or established financial institutions to secure a mortgage or loan. In this post, we will compare traditional financing with digital lending and learn about a leading digital financial solution that offers short-term mortgage loans in the UK. 

A couple meeting with a bank manager for a traditional mortgage

What is the Traditional Financing Process?

Traditional lending methods are generally perceived as low-risk and safe, as such, they typically follow a set of stringent eligibility criteria. To qualify for a loan, one requires a good credit history, stable income, and comprehensive financial documentation. 

The application process usually involves in-person meetings, paperwork, and extensive reviews. Due to this manual process, the approval can take weeks or even months, depending on the institution’s internal systems and processes.

Pros of Traditional Financing

  • Established System: Offers tried-and-tested processes backed by years of industry experience.
  • Competitive Terms: It often provides lower interest rates and long repayment terms for clients with strong financial credentials.
  • Comprehensive Regulatory: Operates within a strict legal framework to protect borrowers and lenders.

Cons of Traditional Financing

  • Time-Consuming: The lengthy approval process can delay property purchases, especially in competitive markets.
  • Rigid Requirements: Overseas buyers without a UK credit history or proof of income may face challenges. Banks also usually require in-person meetings and physical documentation, which can be challenging for buyers in a different time zone or country.
  • Risk Management: It relies on established risk assessment models and is more conservative. This may make it more difficult for some applicants, especially foreigners, to secure a loan.

What Is the Digital Lending Process?

Digital lending is a modern alternative that uses technology to streamline the financing process. The digital lending process involves three elements:

1. Online Application: Borrowers submit applications through a digital platform to reduce the need for extensive paperwork and in-person meetings.

2. Asset-Based Evaluation: Instead of relying on credit history, digital lenders often focus more on the property’s value and potential.

3. Quick Approvals: Technology-driven assessments and processes enable faster decision-making and funding.

Pros of Digital Lending

  • Speed and Efficiency: Loan decisions and fund disbursements are often made available within days of sending the application.
  • Accessibility: Designed as an alternative to non-traditional buyers, it usually requires no UK credit history.
  • Flexibility: It focuses on the property’s value rather than the borrower’s credit score or income history.
  • Convenience: An entirely digital process that allows borrowers to manage their applications remotely.
  • Security: Modern platforms invest heavily in cybersecurity and compliance to ensure data protection and trustworthiness.

Cons of Digital Lending

  • Higher Interest Rates: Some digital lenders may charge slightly higher rates compared to traditional banks.
  • Limited History: As a newer option, digital lending may lack the longstanding reputation of traditional institutions.
A couple applying for a  loan online

Which Lending Type Is Better for Foreign Buyers?

Deciding between traditional lending vs. digital lending depends on the buyer’s specific needs, goals, and circumstances. However, for foreign buyers looking to buy property in the UK, digital lending platforms are worth considering for their practicality and efficiency.

For instance, GOGOPROP offers a solution that bridges the gap between traditional and digital lending by offering asset-based, short-term loan services geared towards overseas buyers. Our digital lending business model is designed with international clients in mind, focusing on accessibility, speed, and flexibility.

With our seamless application process and fast approvals, we will make sure your funding is available when you need it. We guarantee transparency, with real-time updates on your loan process and competitive rates with no hidden fees. 

Manage your loan application online with real-time updates and dedicated support every step of the way. With GOGOPROP, foreign buyers can enjoy a simpler, more convenient way to secure their UK property investment.

GOGOPROP

When our family bought an electric cargo bike earlier this year, one of my biggest fears was that this lovely and expensive new machine was going to get stolen. So I got the best lock money could buy, and I started to investigate: did I need ebike insurance?

First, I called my homeowners insurance provider to see if they would cover the bike if it were stolen. To my surprise, because it’s an electric bike, not only did my policy not cover it, they wouldn’t even add it for an additional fee or sell me a separate policy for it, the way they did for our family car.

Instead they referred me to an insurance company that specializes in bikes and ebikes. I bought a policy from them and sleep a little better for it.

I’ve heard similar stories from other ebike owners. And I’ve heard worse.

What can happen without ebike insurance

The saddest stories are the ones where someone assumed their homeowners or renters or car insurance covered their ebike, and after it was stolen or seriously damaged, it turned out it wasn’t covered.

"And then there are the stories about people whose ebikes were covered by their homeowners policy, but their premium went way up when they made a claim for a stolen ebike."
<span class="blog-quote-name">-Kyle Miller, CEO Brass Hands</span>

Why it’s hard to insure an ebike

When it comes to insurance, ebikes land in a gray area outside standard homeowners insurance and auto insurance. Here’s why:

  • Ebikes are new in terms of the insurance industry. Most of the several million ebikes in the U.S. were purchased in the last two years. Insurers aren’t familiar with them, and insurers don’t like to be surprised by unfamiliar products.
  • Ebikes are more expensive than regular bikes. Policies that cover bikes, like most homeowners or renters policies, might have also covered ebikes until the insurer had to pay much larger claims than they expected to replace a damaged or stolen ebike. See above about insurers and surprise. So some policy terms got changed.
  • Finally, ebikes get stolen a lot, and not only from people’s homes. They are ridden and locked up outside all over the place, which makes them more vulnerable than other valuable household items.

Steps to take to properly insure your ebike

The odds that your ebike is covered by your existing insurance is lower than you may think. Here’s what to do to find out if you need ebike insurance:

  1. Call your insurance company and find out what they cover. Things to bring up: coverage of accidental damage, theft, and travel (like what would happen if you flew somewhere with your bike and the airline did a number on it). Does the insurance company consider your ebike a “luxury item”? If you’re happy with the coverage, great! You’re good to go.
  2. Consider bike-specific coverage. If you aren’t covered, or feel like the coverage you do have isn’t enough, here are some things to think about.

Bike insurance covers all kinds of bike specific things, not just theft. Think damage to the bike from a collision, medical payments if you are injured in a collision, insurance for the bike if you are traveling with it or racing it, or a bike rental while your bike is being repaired. Some policies even cover things like accessories (like bike lights and panniers) and riding clothes.

Bike claims won’t affect your other insurance premium. Should you need to make a claim on your ebike, your home insurance premium won’t change or get canceled.

We can help

Want to learn more about ebike insurance? Join Tempo and get easy access to insurance quotes, and other ways to protect your ebike right inside the app.

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