Lending is a decade behind online banking according to new data

Its report further found that three quarters (75%) of respondents wanted more clarity as they “switch off” when lenders use industry jargon. Four fifths (80%) believed lenders try to obscure the final cost of a loan, and over half (55%) said it takes too long for a loan to arrive after it has been accepted.

Marqeta pointed to the pandemic as causing a shift in attitudes towards alternative forms of lending. Almost three fifths (59%) of those surveyed said it had “opened their eyes” to alternative finance.

Younger generations were particularly keen to explore alternative lending, with 71% of respondents aged 18-34 saying their eyes had been opened to new means of procuring finance.

Only 55% of those surveyed were aware of what their options were if a loan was denied. When asked about different forms of finance, many were unaware of alternatives.

Buy now, pay later (BNPL) was the best-understood alternative finance option, as 77.6% said they had a good understanding of it. Almost half (47%) did not know what peer-to-peer lending was, and 45% were unaware of salary finance.

However, BNPL has come under fire, with more than two in five people borrowing to meet payments.

Anna Porra, European strategy director at Marqeta, said: “As the cost-of-living crisis continues and consumer confidence hits an all-time low by certain metrics, many will be looking to loans as a source of help. But our survey shows that more education on alternative options is needed.

“Unless consumers understand the options available to them, they may struggle to access much needed finance or be forced to look at more expensive options.

“With over half surveyed saying it takes too long for money to come in once a loan has been accepted, it’s clear that more needs to be done to support those looking for finance, particularly the younger generation.”