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With billions of dollars in monthly origination and listed players like Lending Club, alternative lending is now mainstream in the United States. Experian’s Clarity Services, a specialist in alternative financial services data and solutions, has released a report titled Alternative Financial Services Lending Trends. It includes deep insights into the online consumer lending industry and leverages data points of over 350 million consumer loan applications and 25 million loans.

The report threw a lot of expected statistics and some surprises that should help online lenders pivot to more fertile territory.

Understanding the Channels

Alternative financial services can be obtained from both online and offline platforms. Though online platforms are mushrooming, brick and mortar still remains dominant in the consumer lending industry.

Types of loans

The types of loans in the report are broadly classified in two categories-

  1. Installment loans – Loans repaid in a series of regular payments (months or years) are known as installment loans.
  2. Single pay – Single pay loans are repaid in a single payment (Lump sum) and usually have a shorter tenure (days/weeks).
Market Trends- Product Mix

Everybody is aware of the fact that online lending has grown, but the growth numbers presented by Clarity are staggering. Following are the charts that capture the growth pattern of online installments and online single pay loans in regards to funded loan volume and the number of funded loans from 2014 to 2018.

The online installment loans marked a growth of approximately 643% in 2018 starting from 2014 whereas the single pay loans’ market doubled in four years.

The number of loans analysis threw similar growth numbers as the loan volume analytics.

Data suggests that online installments loans are the most popular choice in the alternative lending space. The number of unique borrowers has increased by 30% for the past three years.

Loan Characteristics

Installment Loans

  • Loan amount Almost 60% of loans fell between the $500 to $2000 range in 2018, rising from 43% of all loans in 2014. Only 15% of the funded loans were under $500 in 2018. Therefore the average loan amount is increasing on a year-on-year basis.
  • Loan Tenure – Maximum loans (over 62%) had a repayment period of over 7 months in 2018 whereas only 9% online installment loans have a payment period of fewer than three months.
  • Scheduled monthly payment amount – The monthly payment amounts have declined over time. Around 34% of monthly repayments were less than $200 in 2018. This number is an increase from 17% in 2015.

Single Pay Loans

  • Loan Amount – Loans above $500 grew from 23% to 28% between 2014 and 2018. The overall trend is towards an increasing loan amount.

Credit Quality

A credit profiles analysis indicates that online lending is finding favor among not only the subprime category but also the prime and near-prime, which are aggressively adopting alternative financing options.  Clarity reports that 29% of consumers with an alternative credit inquiry fell into the prime or near-prime categories in 2018 compared to 21% in 2017.

Consumer Demographics
  • Age – The online installment borrowers were older than the online single pay borrowers whereas the age of installment and single pay loans’ borrowers remains the same in the case of the storefront channel.

  • Income trend – The online borrower reported a higher income as compared to one borrowing through a storefront.

In the online segment, income values tend to be higher for Installment loans than single pay loans.

  • Data Points:

– Forty-five per cent of online installment borrowers reported an annual income over $40,000, while 37% of single pay borrowers reported incomes in this range.

– Conversely, 15% of single pay borrowers reported an income of less than $20,000, as opposed to only 8% of installment borrowers.

Hence consumers falling under the category of online installment loans are likely to have a higher income as compared to other sub-groups.

  • Consumer Choice – Consumers that prefer privacy opted for online lending whereas the consumers that were looking out for a reliable personalized experience went for the storefront option.
  • Location – California and Texas are the obvious leaders due to their size. Ohio is steady at third place for the last 3 years with Illinois at the 8th position.
Takeaway

Clarity’s alternative credit loan data provides key learning points for all in the alternative lending industry.

  • The Online Installment Loan market is growing and the demographics support further growth.
  • The online installment loans are being increasingly characterized by larger loan amounts, longer payment terms, and smaller scheduled payment amounts.
  • There are early signs of deterioration in credit performance.
  • Over half of the online borrowers in 2018 were new to the alternative lending space.
  • Applicants new to the alternative lending space in 2018 have higher credit scores than those previously seen. However, 2017 borrowers who migrated to traditional lending in 2018 also had higher credit scores than those who stayed with alternative financial services.
  • California, Texas, and Ohio continue as the top three states for online lending in number of loans, while the largest growth in borrowers is in the middle states like Nebraska and Kentucky.

Insight: Online Lenders will be well served to identify patterns like an increase in loan amount and loan tenure and the rise of Middle America looking for hassle-free lending options.

The post Alternative Lending: Insights from Clarity appeared first on Lending Times.

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United States LendingClub Expands Program to Help Borrowers Actually Pay Off Debt (Lend Academy), Rated: AAA

LendingClub shared a few stats on borrowers who choose this method:

  • Save an average of nearly $900 over the course of their loan
  • Cut their credit card interest rate nearly in half
  • Increase their credit score in just three months

The product has been tested for over a year and LendingClub is working with a partner network of over 1,700 credit card, bank and loan companies to make the process seamless. What’s interesting is borrowers can add up to 12 creditors per loan which is an important feature since borrowers often hold balances across many cards.

Turning Lending Club’s Worst Loans into Investment Gold (Towards Data Science), Rated: A

This is a writeup of a machine learning project I completed. In this post I hope to:

  • Describe my algorithm for predicting loan defaults.
  • Use the algorithm to construct a portfolio of clean loans…
Inflation Miss (PeerIQ), Rated: AAA

US Core CPI rose by 2% YoY in May, just at the Fed’s target rate but below economists’ expectations. Consistently low inflation is boosting calls for a rate cut next week. The market is pricing in a 24% probability of a rate cut next week and a 76% probability of a rate cut in September.

Source: Bloomberg, PeerIQ Fintech algorithms discriminate 40% less than traditional lenders (Quartz), Rated: AAA

Algorithmic fintech lending is less discriminatory against minorities than traditional loan officers, according to a recent study of US mortgages. The findings signal hope that technology could provide financing that’s more fair, but the research also underscores how widespread discrimination remains.

The US housing market has long been prejudiced against minorities. When Latino and Africa-American borrowers are looking to buy a home, they usually end up paying 7.9 basis points (0.079 percentage points) more than whites to take out the mortgage, and 3.6 basis points more when they refinance the debt, according to a National Bureau of Economic Researchworking paper published this month.

Buttigieg worries tech may add racial bias to credit decisions (American Banker), Rated: A

Pete Buttigieg said the way credit scoring is done in the U.S. is fraught with inequality and he’s worried the process may get worse with systems based on artificial intelligence.

Commercial Real Estate Crowdfunding Eyes ’18-Hour Cities’ for Small Investors (The Street), Rated: A

When Clear Point Gardens, a 604-unit apartment complex in Columbus, Ohio, recently changed hands, it produced a nearly 43% gain in 16 months, an amazing windfall for investors in the deal.

All 68 of them.

The sale of Clear Point, financed with help from investors on CrowdStreet’s online platform, is the latest example of how online syndication is revolutionizing the way deals are financed in the $6 trillion commercial real estate market.

HSBC launches digital mortgage platform with help from Roostify (HousingWire), Rated: A

One of the world’s largest banks is about to join the digital mortgage revolution, as HSBC Bank USA, the U.S. arm of HSBC Group, announced that it is partnering with Roostify to launch a digital mortgage platform.

Mirador’s Trevor Dryer: ‘The world doesn’t need another high price lender’ (Tearsheet), Rated: A

Trevor started Mirador to fill this void of bank-originated small business lending. We talk about why he started Mirador with a lending as a service model and what painpoints he was addressing.

Mirador's Trevor Dryer: 'The world doesn't need another high price lender' - SoundCloud
(1360 secs long, 754 plays)Play in SoundCloud

Dave is launching a checking account that helps users build their credit score (Business Insider), Rated: A

The Los Angeles-based company, backed by investors including Mark Cuban, the DJ Diplo, and hedge fund Mark 2 Capital, said on Tuesday it’s rolling out a new checking account product that reports all rent payments to credit agencies. The new feature, added to Dave’s original app, helps customers to build their credit. Dave plans to begin reporting utility payments later this summer.

CoreLogic Launches Marketrac Platinum (CoreLogic), Rated: A

With Marketrac Platinum, lenders and title companies can utilize the interactive platform to identify top performing real estate agents and brokerage firms to prioritize professional relationships based on market trends.

Zirtue Revolutionizes Peer-to-Peer Lending (IT Business Net), Rated: A

Sprout Mortgage Launches ACORN Automated Underwriting System (Yahoo! Finance), Rated: A

Sprout Mortgage, the innovative force in Non-QM lending, today announced the launch of its ACORN automated underwriting system (AUS) as part of an ongoing effort to deliver value-added services to its third-party origination clients.

Finicity Integrates with LendingQB to Optimize Mortgage Origination Process (PR Web), Rated: B

Finicity announced today an integration with LendingQB. LendingQB’s platform now uses Finicity’s digital Verification of Assets (VoA) solution to allow lenders to free up resources, increase processing speed and reduce mortgage fraud while providing borrowers with a more efficient and positive experience.

Cardholders Seek to Capital-ize on Madden (The National Law Review), Rated: A

Last week, three Capital One cardholders filed a putative class action in the Eastern District of New York, Cohen v. Capital One Funding, LLC,1 alleging that the rates of interest they paid to a securitization trust unlawfully exceed the sixteen percent threshold in New York’s usury statutes.  The Plaintiffs seek to recoup the allegedly excessive interest payments and an injunction to cap the interest rates going forward.

Cross River poaches execs from student refinancing firm Laurel Road (American Banker), Rated: A

Cross River Bank, a Teaneck, N.J.-based bank that focuses most of its energy on supporting fintechs, is hiring several people from the student loan refinancing company Laurel Road to its capital markets team.

Cross River’s fintech partners include Affirm, Circle, Best Egg, Coinbase, Rocket Loans, Stripe, Upstart and Transferwise.

Optimizely Closes $ US105M Financing Round (Which-50), Rated: A

Optimisation platform Optimizely has closed US$105 million in financing, including US$50 million in Series D funding. The funding, led by Goldman Sachs Private Capital Investing, also included Accenture Ventures.

Austin Niemiec Named New Executive Vice President of Quicken Loans Mortgage Services (Yahoo! Finance), Rated: B

Quicken Loans Mortgage Services (QLMS), the second largest mortgage lender serving the needs of brokers, regional banks and credit unions, today announced that Austin Niemiec has been named Executive Vice President.

Self Lender Awarded Inaugural Inclusive Fintech 50 (PR Newswire), Rated: B

Self Lender is pleased to announce its inclusion in the inaugural list of winners of the Inclusive Fintech 50. The Inclusive Fintech 50 is a competition launched in February to help early-stage fintech companies attract capital and resources to benefit the world’s 3 billion financially underserved people. The competition was organized by MetLife Foundation and Visa Inc., with global nonprofit Accion and World Bank Group member IFC.

United Kingdom No sign yet of breaking out of circle (The Times), Rated: AAA

The early days of a company’s life on the stock market tends to set the tone for what follows. The grief around Funding Circle’s listing began even earlier and has continued to..

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United States Amazon launches a credit card for the ‘underbanked’ with bad credit (CNBC), Rated: AAA

The e-commerce giant partnered with publicly traded bank Synchrony Financial to launch “Amazon Credit Builder” — a program that lends to shoppers with no credit history or bad credit, who would otherwise be exempt from Amazon’s loyalty cards.

The card has the same perks, like 5% cash back on purchases, that come with the popular Amazon Store card, which Synchrony also powers.

This new Amazon card could open the door to a huge segment of U.S. buyers. According to a 2018 FICO survey, more than 11% of the population has a credit score below 550. About 4% of the population has a “bad credit score,” which according to FICO Score is between 300 and 499. Meanwhile according to a 2017 survey by the FDIC, 25% of U.S. households are either unbanked or underbanked.

Credit Card Debt Study: Trends & Insights (WalletHub), Rated: AAA

Although we started 2019 owing more than $1 trillion in credit card debt, Americans repaid $38.2 billion in credit card debt during Q1 2019 – the fourth-largest quarterly payoff ever. Rather than a turning point in consumers’ addiction to overspending, however, the Q1 2019 paydown could actually be a sign that even more debt than expected is now in the forecast for the rest of the year. In fact, WalletHub projects a $70 billion net increase in consumer credit card debt for 2019 overall.

Source: WalletHub
Brex Lands $ 2.6 Billion Valuation With Latest Funding Round (Bloomberg), Rated: AAA

Few companies in Silicon Valley have attained multi-billion dollar valuations as quickly as Brex Inc., the fintech startup whose worth investors now peg at $2.6 billion—just one year after launching its first product.

Brex plans to announce that valuation on Tuesday, along with the news that it has raised $100 million in fresh funding, in a round led by Kleiner Perkins Digital Growth Fund. Other investors in the round include the Y Combinator Continuity Fund, Ribbit Capital and DST Global. Bloomberg reported some details of the funding round last month.

Costs Rise As Capital Chases Neo-Banks (Crunchbase), Rated: AAA

Money is chasing the trend. Chime has raised a total of $309 million, including a $200 million round earlier this year. Robinhood has raised just under $540 million, including a $363 million round last year. SoFi has raised $2.5 billion, including $500 million this year. Acorns has raised $207 million, including $105 million last year.

Source: Bondcap JPM shutters Finn; GS Marcus (PeerIQ), Rated: AAA

JP Morgan has pulled the plug on its digital bank Finn. Finn’s users will be transitioned to Chase’s mobile app. JPM is also betting on a larger physical presence and is opening 400 new branches in the next 5 years.

GS CEO Solomon told employees that Marcus does not get credit from investors for the progress it has made. Marcus has ~$48 Bn in deposits and ~$5 Bn in loans, and the argument is, that as a Silicon Valley startup, Marcus would be highly valued. The lending side of Marcus appears to be smaller than LendingClub (market cap of ~$1.3 Bn) from an originations perspective.

Source: Bloomberg, PeerIQ
Sunbit Announces $ 26M in Funding Round Led by..
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United States SoFi Loses Three Top Executives (WSJ), Rated: AAA

Three top executives of Social Finance Inc. are leaving the financial-tech startup in the coming weeks, adding to the challenges the company faces as it moves through a tough environment for online lenders.

Marketing chief Joanne Bradford, head of risk Kevin Moss and Ashish Jain, the lender’s top capital markets executive, recently told Chief Executive Anthony Noto about their plans to step down from their roles. All three had been at the company prior to Mr. Noto taking the reins in early 2018.

Tech Driving Bank Earnings Growth (PeerIQ), Rated: AAA

US first quarter GDP growth was revised lower to 3.1%. There is fear that the economy is slowing due to the ongoing trade war and the length of this economic expansion. The 3 month-10 year yield curve fell to its most inverted since 2007 to -12.3 bps. Recessions have usually followed within 18 months of this curve inverting. The market is looking to the Fed to bolster economic growth with the odds of a rate cut at the September meeting now at 54%.

Source: CME, PeerIQ

Technology Driving Earnings Growth

Banks and lenders are reaping the benefits of their technology investments now. Banks like Citi have been able to offer new products and grow their deposit base, while Capital One has improved its efficiency ratio by 400 bps. Banks and lenders continue to make large technology investments for faster growth at lower cost.

Alternative Lenders Continue to Steal Business From Banks (The Financial Brand), Rated: AAA

What is less well known is the rapid growth of PayPal as a digital lending alternative. It may be time for banks and credit unions to wake up, however, as the company announced that they had crossed $10 billion in small business lending in only 5 years.

Amazon Joins PayPal as Top 5 Small Business Digital Lender

Amazon has joined PayPal, OnDeck, Kabbage, and Square as a top 5 digital small business lender. In fact, Amazon revealed that it had made more than $1 billion in small business loans to US-based merchants in 2018.

The peer-to-peer business lender, Funding Circle, also revealed its first-quarter trading update, showing that loans under management rose by 44% compared to the first quarter of 2018, while originations grew by 23% (they have originated $9.5 billion in loans).

Consumer Financial Protection Bureau Releases Rules for Comprehensive Reform of Debt Collection Industry (Debevoise & Plimpton), Rated: AAA

On May 7, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released a Notice of Proposed Rulemaking (“NPRM” or “Notice”) to increase regulation of the debt collection industry.1 The much-anticipated Notice is the outgrowth of the CFPB’s 2016 Outline of Proposals (the “Outline” or the “2016 Outline”), which was a cornerstone of the Obama Administration’s efforts to protect consumers and overhaul all aspects of consumer finance (see our August 10, 2016 client alert on the Outline here). One presidential election and two CFPB Directors later, CFPB Director Kathleen Kraninger announced a more limited plan to put in place substantial protections, but which rejects some of the 2016 Outline’s more ambitious proposals. The NPRM would overhaul the industry by, for example, requiring that debt collectors make no more than seven attempts by telephone per week to reach consumers about specific debts, and allow debtors to opt out of allowing collectors to contact them via e-mail, text messages, or other media. However, the proposal fails to address many of the Outline’s calls for increased regulation of substantiation of debt, decedent debt, and transfer of information to subsequent collectors (among other things).

See the full report here.

Biz2Credit Raises $ 52M In Funding To Expand (PYMNTS), Rated: AAA

Biz2Credit, the online lending platform that helps banks and other financial institutions manage small and medium-sized business (SMB) lending processes, announced Tuesday (June 4) that it raised $52 million in venture funding.

Biz2Credit said the Series B funding round was led by WestBridge Capital.

Jared Kaplan of OppLoans (Lend Academy), Rated: A

The next guest on the Lend Academy Podcast is Jared Kaplan, the CEO of OppLoans.

Lighter Capital Introduces Suite of Alternative Financing Solutions to Fund More Startups up to $ 3 Million (Yahoo! Finance), Rated: A

Lighter Capital announced today that it has launched new financing products to better match the capital needs of growing startups. To date, Lighter Capital has provided over $150 million in more than 500 rounds of financing to over 300 startups. The company has historically provided Revenue-Based Financing and has now broadened its portfolio to include lines of credit and term loans, designed to provide startups capital over time as they need it. Unlike most venture debt, startups do not need to have raised Venture Capital to qualify for funding.

1. Lighter Line of Credit – Startups have fluctuations in capital needs, to make essential payments like payroll or wait for a big customer payment. The Lighter Line of Credit is a revolving working capital line. It enables startups to draw and return capital numerous times, to even out their cash needs.

2. Lighter Term Loan – Provides startups growth capital in a traditional structure with predictable payments. Lighter Capital will also make forward commitments, giving startups the right to get additional capital for a period of time. For example, a startup could get a $500,000 loan today and a commitment from Lighter Capital to provide an additional $500,000 over the following six months.

LendPro Unveils Dynamic Routing Capability to Streamline POS Financing (LendPro Email), Rated: A

LendPro LLC, a provider of Lending-As-A-Service (LaaS) products and platforms for retailers, today unveiled Dynamic Routing —an innovative POS financing solution that automatically matches consumer credit applications with the best-available lending option.

While alternative lending software moves credit applications through a pre-defined, inflexible process, Dynamic Routing by LendPro dynamically guides borrower application data to lenders in the merchant’s financing portfolio based on the attributes of the sale. For example, if the total price for a specific purchase is too large (or small) for a lender’s target loan size, LendPro’s Dynamic Routing system can route the applicant to a different lender. This technological innovation saves time, increases simplicity, and may help the borrower avoid an unwanted credit application.

Why it’s Time to Ask Your Wealth Manager About P2P Lending (Crowdfund Insider), Rated: A

Using a crowdfunding platform, however, 5,000 individuals might each invest $1,000 into the company. Each of those individual investors is exposed to a very small amount of risk, and the company is able to raise the funds without surrendering ownership.

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Though the 2008-09 crisis scarred a lot of real estate investors, the fact is that the US real estate sector has been on a secular growth spree in this decade. The sector plays an integral role in the US economy and contributed $1.15 trillion to the country’s economic output in 2018, which is 6.2% of the nation’s GDP. As a matter of fact, till Q3 2018, individuals owned US$25.6 trillion in real estate, and total mortgages amounted to US$10.3 trillion, which implies that home equity stood at US$15.2 trillion until Q3 2018. That’s a record in itself. Approximately 14.7 million homes have 50% or more of their total equity in their houses.

This represents a massive untapped financial asset for American homeowners. But wary of piling on more debt and with selling the house not an option, homeowners need a new solution to monetize their homes. QuantmRE has brought to market a win-win framework with its shared equity contract agreements. In conversation with Matthew Sullivan, founder/CEO of the company, Lending Times gets a front seat view on how the blockchain-powered solution will help millions of homeowners generate additional liquidity without taking on debt.

The QuantmRE Solution

The fundamental concept behind the company’s platform is “the home owner has equity and wants cash, whereas, the investor has money and wants equity.” QuantmRE’s solutions enable an individual to realize the value of their home’s equity without incurring any further debt. QuantmRE’s funds will purchase a fraction of the owner’s home equity and then tokenize it, building a marketplace for both owners and investors, with new financial opportunities. How?

The explanation lies ahead.

Structure of the Contracts

The QuantmRE contracts are flexible to cater to the needs of different stakeholders and are built to suit varied interests of the homeowners – with some contracts having a 10-year commitment attached to them and some contracts committing for 20-30 years. Along with this, the equity ownership framework will rely on risk profiles of the different contracts.

To illustrate, when the owner wants to part with 10% of the current value of their home, they are selling the future rights to its appreciation. When the owner sells the house in the future, they will provide the investor with a 15%-18% of the value of house. Thus, the company is buying 15%-18% of the future value of the owner’s house at 10% of the present value. This 10% is the shared equity. The company will cap the return in the initial years and the ROI will also be capped at 18%-20% per year.

These are strictly real estate contracts and not loans; here the homeowners simply agree to share the present or future appreciation or depreciation of the value of their real estate. The investor is investing in a real estate option and not investing in any debt.

Under the scenario where the house owner does not sell the house, the contract shall either be refinanced under the same terms as before or shall be renewed on new agreeable terms on all sides.

What are the returns for the investors?

Investor in the funds: The fund will buy the equity instruments from individual homeowners, and the investors will benefit from the overall diversification of the fund. The returns are usually asymmetric and are geared for strong positive alpha and downside protection (due to the structure where it pays for 10% on Day One but receives 15%-18% of future value). Even in the scenario where the house prices remain flat or fall marginally, the funds shall still deliver positive returns. But there is still risk involved, as the downside buffer is limited to an extent.

EQRE Tokens

The company is developing a cryptocurrency token with real intrinsic value: EQRE. These tokens shall be backed by audited pooled real estate assets; the tokens derive their value from the equity interests in the single-family owner-occupied homes. These tokens will be launched in the near future.

It provides a platform to the owners and investors to tap the previously illiquid real estate asset class in a stock market environment enabling the fractional interests in the real estate investments to be traded on the blockchain. The tokenization of real estate will allow small mom and pop investors to diversify their real estate holdings and provide institutional players a platform for liquidity in their real estate investments.

QuantmRE To Date

QuantmRE was founded in December 2017 and has successfully originated close to 100 transactions of over $25 million across a few states. Albeit, currently these transactions are not all QuantmRE contracts. Since its inception, the company has developed its technology, contracts, and design. and is just a few weeks away from launching its EQRE token.

As far as funding goes, the company raised close to US$2 million in 2018 in a seed round. The company plans to raise $5 million for working capital and expansion.

Conclusion

The company offers homeowners an opportunity to liquidate a part of their house without taking on more debt. Investors get to partake in the growth of single-family residential units. This is structured through a shared equity contract. These contracts will further back the token of the company that can be traded. The token of the company (EQRE) is being developed and shall be soon launched. QuantmRE plans to integrate the blockchain and cryptocurrency technology with the real estate sector allowing for liquid profitable real estate investments. The company has its eyes on the $15 trillion unmortgaged equity in US homes and is poised to leverage blockchain tech to make it a strong investment proposition.

Author:

Written by Heena Dhir.

The post How QuantmRE Tokenizes Real Estate on the Blockchain appeared first on Lending Times.

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United States Online lender SoFi has quietly raised $ 500 million in funding, led by Qatar (TechCrunch), Rated: AAA

Online lending startup Social Finance, better known as SoFi, took another tack this morning, quietly announcing in a press release that it has closed half a billion dollars in a single funding round led by Qatar Investment Authority, a Doha, Qatar-based private equity and sovereign wealth fund.

SoFi Raises $ 500M, Valuation Remains $ 4.3B (PYMNTS), Rated: A

The company said it will use the capital to invest in growth and add some muscle to its $2.3 billion balance sheet. The company’s valuation will stay about the same as with the last funding round two years ago, which was led by Silver Lake.

SoFi Is Close to a Deal Putting Its Name on L.A. Football Stadium (Bloomberg), Rated: A

Social Finance Inc., a financial technology startup, is close to signing a deal that would put its name on a new NFL stadium under construction in Inglewood, California, according to two people familiar with the matter.

The deal for the stadium, which would be home to the Los Angeles Rams and Chargers, hasn’t been signed so figures could change. But currently the agreement would have SoFi pay $20 million a year for 20 years, these people added.

Morningstar to Accelerate Credit Ratings Business with DBRS Acquisition (Morningstar), Rated: AAA

Morningstar, Inc. today announced it has entered into a definitive agreement to acquire DBRS, the world’s fourth-largest credit ratings agency, for a purchase price of $669 million. The combination of DBRS with Morningstar Credit Ratings’ U.S. business will expand global asset class coverage and provide an enhanced platform for providing investors with leading fixed-income analysis and research.

PayPal’s Latest Milestone: $ 10 Billion In Small Business Loans (Forbes), Rated: AAA

The small business lending market is booming and it’s not the traditional banks that are benefiting. Fintechs are leading the way. Case in point: PayPal.  It hit a milestone, announcing it has provided more than $10 billion in loans to more than 225,000 small businesses around the globe.

The $10 billion mark comes a little more than five years after PayPal made its first loan. Today it has issued more than 650,000 loans through financing programs in the U.S., UK, Australia, Germany, and Mexico.

PayPal Crosses $ 10 Billion In Small Business Loans (Lend Academy), Rated: AAA

Now they are hitting some impressive quarterly milestones, originating $1 billion per quarter, so their next $10 billion is surely to happen even quicker.

deBanked recently highlighted the leading small business originators which showed that PayPal is solidly the leader when it comes to originations in the US. OnDeck which is second to PayPal reported originations of $636 million in Q1 2019. According to data provided by Funding Circle on their website, which includes their lending globally, they have originated $9.5 billion in loans.

Source: deBanked.com LendingClub Posts Presentation in Advance of Shareholder Meeting (Crowdfund Insider), Rated: AAA

LendingClub (NYSE:LC) has posted a presentation apparently in preparation for its annual shareholder meeting which is scheduled to take place on June 5, 2019.

Source: LendingClub

View the full presentation right here.

Borrowers can save over $ 2,000 by shopping for lenders who offer low mortgage fees (LendingTree), Rated: AAA

Key findings

  • Mortgage fees in the first quarter had a median of $2,059 for purchase loans and $1,807 for refinancing.
  • The more offers a borrower receives, the greater the potential for savings. For people receiving five offers, the median spread between the highest and lowest fees offered was $2,045.
  • 7% of new purchase borrowers and 8% of refinance borrowers were offered $0 in fees.
  • 15% of new purchase borrowers and 19% of refinance borrowers paid less than $500 in fees.
  • 28% of purchase borrowers paid less than $1,000 in mortgage fees, with 35% of refinance borrowers also paying less than $1,000 in fees.
  • At the high end, 13% of purchase borrowers were hit with fees over $5,000, 3% over $10,000 and 0.21% over $20,000.
  • For refinance loans, 12% were offered upfront fees over $5,000, 1% over $10,000 and 0.02% over $20,000.

Home Loan Provider Earns Top 5-Star Rating from TopConsumerReviews.com (PRWeb), Rated: A

TopConsumerReviews.com recently gave their highest rating to LendingTree, an industry leader among providers of Home Loans, for another consecutive year.

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

First, a quick summary of headlines. The Fed agreed to keep interest rates on hold for longer according to the minutes of the April meeting. The decision is expected to help inflation pick up towards the Fed’s 2% target. The Fed’s latest ‘dot plot’, shown below, indicates Fed governors on the margin expect lower rates in the 2019 to 2021 timeframe suggesting lower growth expectations.

Source: PeerIQ, US Federal Reserve, Bloomberg

“…what we see is right now the fundamentals of the economy in the U.S. on a global basis and the fundamentals of consumers and unemployment being low as you mentioned, means that credit is in good shape and we just don’t see that changing a lot.”

Brian Moynihan, CEO of Bank of America

Kroll also released a report on the Evolution of the Consumer Loan Marketplace Sector to lay out how the sector has matured over time. The report comes on the heels of a Fitch report that said that declining credit enhancements in MPL deals is unwarranted.

Prevent attrition and win new relationships with loan options (Bankless Times), Rated: AAA

Small business clients are increasingly looking to alternative lenders for financing. There are numerous draws for SMB clients: a fast and easy application process, quick funding, and a higher chance of being approved for a loan.

According to the Federal..

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Consumer lending in the US reached nearly 1.5 trillion dollars in 2018, according to the Federal Reserve Board of Governors, and European banks reported a demand growth of 25% in the second quarter of 2018. Needless to say, it’s a good time for lending.

While banks are still paying out the lion’s share of the loans, alternative lenders are gradually moving in to fill holes in the ever-increasing lending market.

Fintechs Exploit the Growing Market

The traditional banking sector is entrenched in their old way of doing business. Banks and customers alike expect a certain customer experience and style of operational management. While this may appeal to some customers and lending institutions, it comes at a significant cost. Each teller or call-agent interaction at a traditional bank costs an average of four dollars compared to merely ten cents for a mobile interaction.

While the profits of running a fintech are clear, the process of getting up and running is not without its challenges.

Practical Steps for Setting up a Lending Company

Lending markets vary from country to country depending on regulations, legislation, and consumer behavior. This simple roadmap outlines the general process to get started.

Point One: Becoming A Legitimate Enterprise

In order to start lending online, business owners need to create a legal entity. This is the vehicle that all lenders will use to navigate red tape. As this process varies greatly from business to business, it may take as little as 1% or as much as 20% of your initial startup budget.

The basic steps include:

One possible way of circumventing this is to purchase an already existing bona fide legal entity or lending franchise. For example, the largest franchise lender in the US is Liquid Capital. The short-term costs may run a bit higher, however, the long-term benefits of using an existing household name could potentially pay large dividends.

In addition to the unique requirements for lending entities, regular business costs will often crop up as well. Among others, these could include hiring and administrative overhead and office rental. On average, these costs could take anywhere from 10%-12% of your startup budget.

Point Two: Raising Funds

Raising capital to lend out is the primary operational challenge for any lending startup.

Usually the best way for a startup to begin lending is with their own capital, but when that is not possible (or favorable) funds can be raised in the marketplace. Recently, institutional lenders have become much more comfortable with providing capital to lending startups following the rise of the P2P model.

Any lending company funded by public investors will have to factor in the cost of hiring a Certified Public Accounting firm to perform an audit to certify all financial data including their business plan, valuation, and other financials.

Point Three: Using the Right Technology Platform

The core of any modern lending company is the technological platform it runs on. The platform is the brain of the business and takes time to nurture and grow. It is best to do this in parallel with the other points as it is the primary capital asset of the operation.

When it comes to platforms, there are two main options: building your own from scratch or purchasing an existing platform from a vendor. This crucial decision will have a long-term impact on the business and will greatly affect setup and operational costs. Each option comes with pros and cons:

  • Building a lending system from scratch is more time-consuming, and can take up to 12 months. It requires a substantial upfront investment as you will need both financial and technological expertise to pull it off. Additionally, time-sensitive shifts in the market could be a factor, so timing your release is of paramount importance. While this option could be risky, it gives lenders full control over the product they build.
  • Purchasing an existing lending platform is generally less expensive and faster. There are a wide range of solutions both out-of-the-box and fully-customizable. The options fall into two general categories: traditional core banking systems (eg. Oracle, Temenos, and Infosys) or fintech-focused solutions (eg. HES Lending Software).

There are number of software challenges that digital lender should consider when choosing a platform:

  • In order to optimize productivity, systems often require further customization.
  • Some systems only cover a single or hand-full of loan management aspects like underwriting, loan origination, or loan servicing, and do not support many back-office functions.
  • Systems often do not integrate with the majority of third-party services, so lenders might end up needing to mix and match software to run their business.
  • Some systems do not extend well into new markets or product segments.
  • Some systems require license upgrades to increase the loan volume or number of user accounts.
In Conclusion

With a good understanding of the industry, thorough planning, and about $200,000 to $1,000,000 of startup capital, a state-of-the-art lending business can be launched. Not only do these businesses financially benefit their owners and investors, but they come with the satisfaction of knowing that every loan issued has great potential for improving the lives of the borrowers and their communities.

Author:

Natalie Pavlovskaya is the Chief Marketing Officer at HES (HiEnd Systems), a fintech company behind comprehensive lending and credit scoring solutions. She is a Marketing Executive with international business experience in CIS, EMEA, and US, working for more than 7 years in digital marketing.

The post Launching an Online Lending Business: A Blueprint for Taking Off appeared first on Lending Times.

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United States DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2019-3 Trust (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by SoFi Consumer Loan Program 2019-3 Trust (SCLP 2019-3):

— $420,000,000 Class A Notes at AAA (sf)
— $31,100,000 Class B Notes at AA (sf)
— $62,500,000 Class C Notes at A (sf)
— $35,600,000 Class D Notes at BBB (sf)

View the full report here.

KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2019-3 (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Prosper Marketplace Issuance Trust 2019-3 (PMIT 2019-3). This is a $380.99 million consumer loan ABS transaction.

Class Rating Initial Class Principal
A A- (sf) $270,750,000
B BBB- (sf) $51,470,000
C BB- (sf) $39,720,000
D B- (sf) $19,050,000
Millennial DQs on the rise; GreenSky earnings; OCC on a fix for Madden? (PeerIQ), Rated: AAA

US consumer debt rose by 0.9% QoQ in 1Q to $13.7 Tn.

Source: Bloomberg, PeerIQ

Mixed FinTech Earnings

FinTech issuers saw growth in revenues and loans. Pace of loan growth weakened slightly as originations fell at Enova and grew by less than 10% YoY at OnDeck and OneMain. Stock price performance post earnings was mixed. Enova saw its stock price increase by 18% post earnings while OnDeck’s stock price dropped by 16%.

Source: Bloomberg, PeerIQ High Income and Super Prime Borrowers Taking Bigger Share of Personal Loans on LendingTree Marketplace (Lending Tree), Rated: AAA

Over the past 10 years, the amount of outstanding personal loan debt has increased by 75%.

Key findings

  • The share of personal loan inquiries from those with incomes over $108,000 increased by 77% between the second quarter of 2017 and the first quarter of 2019, while the share of inquiries from people earning over $84,000 increased by 65%.
  • The share of personal loan inquiries from super prime borrowers (740 and higher) increased by 47% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime and super prime borrowers (680 and higher) rose by 36%.
  • The share of personal loans closed by borrowers with incomes over $108,000 on the LendingTree marketplace increased by 38% between the second quarter of 2017 and the first quarter of 2019, and the share of borrowers earning over $84,000 increased by 26%.
  • The share of closed personal loans from super prime borrowers (740 and higher) increased by 37% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime borrowers (680 and higher) rose by 19%.
  • Borrowers with incomes up to $24,000 decreased their share of closed loans by 22%, and those with incomes up to $48,000 decreased their share by 17%.
  • The share of loans closed by borrowers with scores below 560 increased by 28%, but the share of closed loans from borrowers with scores between 560 and 619 dropped by 24%.
  • The share of inquiries from people with incomes up to $24,000 dropped by 27% during the same period, while inquires from those with incomes up to $48,000 dropped by 16%.
  • The share of loan inquiries by borrowers with scores below 560 decreased by 12%, and the share of closed loans from borrowers with scores below 620 decreased by 9.2%.

For example, in the SoFi Consumer Loan Program 2017-3 LLC, securities show that the average gross income of borrowers as of May 2017, was $141,780, with an average FICO score of 731, and an average VantageScore of 682. The most recent offering, reported in February 2019, showed borrowers had an average income of $151,144, an average 753 FICO score, and a 713 VantageScore.

Job Loss and Medical Expenses Leading Causes of Bad Credit (Yahoo! Finance), Rated: AAA

Job loss and medical expenses are the leading factors causing Americans’ credit scores to drop, according to new research by Elevate’s Center for the New Middle Class (CNMC).

According to the new report, 55% of respondents cited job loss or reduction in work hours as the reason why their credit score dipped below 700. Nearly a quarter (24%) cited medical bills as the primary cause. Following these leading factors, a variety of typical, seemingly innocuous expenses follow, including repairing a car (11%), leaving home for the first time (6%), and putting a child through college (5%).

Non-prime consumers are 86% more likely to experience multiple factors that negatively affect their credit score compared to just one. For example, of the 23% who mention a medical reason, about three-quarters (75%) also experienced an income drop, severely complicating their ability to manage and cover medical expenses.

Americans Use Short-Term Loans to Pay Off Debt (Lexington Law), Rated: A

American debt is at an all-time high. How did we manage to dig ourselves into a steep $13 trillion hole? Credit card debt alone accounts for $1 trillion of this debt, with the average balance over $6,000 per capita.

  • 33% of Americans are going into debt to pay off debt
  • Generation X is most likely to incur short-term debt to pay down long-term debt
  • Women who use debt to make other debt payments tend to do so multiple times
Bernardo Martinez of Funding Circle USA (Lend Academy), Rated: A

In this podcast you will learn:

  • The knowledge that Bernardo brought with him from PayPal.
  • What he has learned in his first year on the job at Funding Circle.
  • The range of terms for their small business loans.
  • The types of investors they have on their platform today.
  • How and why 72% of their customers came to Funding Circle first.
  • How their offering compares to what is offered at banks today.
  • Who Bernardo sees as their biggest competitors.
  • How they view the SBA and their loan guarantee program.
  • How the LendingClub partnership came together.
  • Why no other online platform has reached significant scale in term loans for small business.
  • How they expanding their business into Canada.
  • Who they are hiring for their new Denver office.
  • How they are approaching their relationships with regulators in DC these days.
  • How they helped get SB-1235 passed in California.
  • How Funding Circle is monitoring their risk as it pertains to the economic cycle.
  • What is most exciting for Bernardo today at Funding Circle.

How a Silicon Valley startup is trying to rebrand payday loans (Vox), Rated: AAA

Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money.

The app lets her withdraw up to $100 a day, and never more than what she actually makes in a pay period, and then withdraws the money from her checking account once her direct deposit hits.

Unsurprisingly, payday lenders typically target low-income people — a 2013 Pew report found that 58 percent of people who use payday loans have trouble meeting monthly expenses at least half the time and usually borrow to deal with “persistent cash shortfalls rather than temporary emergencies.”

The average American household with student debt owes almost $48,000, and experts believe that student loan debt has held millennials back from major life milestones like marriage, homeownership, and having children.

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United States This crowdfunding firm just picked the carcass of RealtyShares (The Real Deal), Rated: AAA

New York-based iintoo acquired RealtyShares’ assets, Inman reported. The move boosts the company’s portfolio size to $2.5 billion assets under management from $1 billion, according to the company.

Current and former investors in RealtyShares will be able to access iintoo’s crowdfunding platform, the report said. The deal — terms of which were not disclosed — is a joint venture between iintoo and Texas-based real estate firm RREAF Holdings, LLC, which will manage the investment porftolio.

Meet the 2019 CNBC Disruptor 50 companies (CNBC), Rated: AAA

14. Kabbage

Founders: Rob Frohwein (CEO), Kathryn Petralia (President), Marc Gorlin
Launched: 2009
Headquarters: Atlanta
Funding:
 $489 million
Valuation: $1.2 billion (PitchBook)
Key technologies:
 Artificial intelligence, cloud computing, machine learning
Industry: 
Credit, financial services, lending

26. SoFi

So far, 600,000 members, $30 billion in loans

33. Affirm

Founders: Max Levchin (CEO), Nathan Gettings, Jeff Kaditz
Launched: 2012
Headquarters: San Francisco
Funding:
 $800+ million
Valuation: $3 billion (PitchBook)
Key technologies:
 Machine learning, software-defined security
Industry: 
e-commerce, financial services, fintech

New LendingClub Account Performance – Q1 2019 (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy Personal Loan Offers Report – April 2019 (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 9.23% in April.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 9.23%, an increase of 13 basis points from the prior month and an increase of 188 basis points from the same period one year ago.
  • At $20,810, the average loan amounts offered with the best APRs to all borrowers with a score of 760 was up 0.33% ($69) from last month, and down 9.44% ($1,964) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 5.15% on average, and loan amounts of $19,489. A borrower with this APR and loan amount would save $1,565 by consolidating debt with a 10% APR over a three-year term.

Is the Point-of-Sale Trend Putting Pressure on Plastic? (Markets Insider), Rated: AAA

The latest entrant to the credit market, point-of-sale loans, may be shaking up how consumers finance large purchases. According to the TransUnion (NYSE: TRU) Q1 2019 Industry Insights Report, this phenomenon, combined with the popularity of credit card reward programs, may be particularly taxing for the private label card category.

Year-over-Year Origination Growth

Card Type Q4 2018 Q4 2017 Q4 2016 Q4 2015 Q4 2014 Q4 2013
Private Label -5.5% -6.7% -3.8% -0.1% 4.1% 9.2%
 Bankcard 2.9% 0.1% -4.4% 15.1% 7.4% 18.1%

Q1 2019 Credit Card Trends

 

Credit Card Lending Metric

Q1 2019 Q1 2018 Q1 2017 Q1 2016
 Number of Credit Cards 432.8 million 416.5 million  405.8 million 386.4 million
Borrower-Level Delinquency Rate (90+ DPD)  1.89%  1.78%  1.69%  1.50%
Average Debt Per Borrower $5,554 $5,472 $5,332 $5,193
Prior Quarter Originations* 16.5 million 16.0 million 16.0 million 16.7 million
Average New Account Credit Lines* $5,296 $5,283 $5,262 $5,091

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Growth in Personal Loans Led by Super Prime Consumers

Personal loan balances continued to climb in Q1 2019, growing 19.2% year over year to a new high of $143 billion. Over the past four years total balances have nearly doubled, growing from $72 billion in Q1 2015. Growth is occurring across all risk tiers with originations increasing 9.7% to 5.0 million in Q4 2018.  Super prime borrowers had the largest growth on the origination front with an increase of 22.5% year-over-year, compared to 19.5% over the same period last year.

Q1 2019 Unsecured Personal Loan Trends

 

Personal Loan Metric

Q1 2019 Q1 2018 Q1 2017 Q1 2016
 Total Balances $143 billion $120 billion $102 billion $93 billion
Number of Unsecured Personal Loans  21.4 million 19.2 million 16.9 million 15.4 million
Number of Consumers with Unsecured Personal Loans  19.3 million 17.6 million 15.7 million 14.7 million
 Borrower-Level Delinquency Rate (60+ DPD) 3.47%  3.51% 3.72% 3.59%
 Average Debt Per Borrower
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United States SoFi launches gig-focused ETF (TechCrunch), Rated: AAA

Today, the company announced a new exchange-traded fund (ETF) product focused on the gig economy. GIGE, which trades on Nasdaq, is an actively managed fund advised by Toroso Investments that allows investors to capitalize on this hot sector of the economy. Toroso offers a range of services around creating and managing ETFs.

The company also announced the creation of an ETF focused on high-growth stocks. That ETF, which trades as SFYF on the NYSE, is designed to identify and capture the growth of the top 50 of the 1,000 largest publicly traded issues.

LendingClub Records Higher Transaction Fees on the Way to Earnings Beat (TheStreet), Rated: AAA

Online-loan marketplace LendingClub (LC – Get Report) was rising more than 14% Wednesday to $3.70 after reporting a surprise profit in the first quarter, though the company’s guidance was short of expectations.

LendingClub reported a 22% increase in transaction fees that led to a 15% increase in revenue to $174.4 million and adjusted earnings of 2 cents per share. Wall Street was expecting the company to report revenue of $169.4 million and a loss of 3 cents per share.

Higher Fees Drive LendingClub’s Earnings Beat (PYMNTS), Rated: A

The marketplace lending platform reported adjusted net loss of $11.25 million, or 3 cents a share — red ink, but less than the 4 cents per share loss analysts were forecasting.

That stronger-than-expected revenue outcome was driven by stronger-than-expected loan originations during the first quarter, which rose 18 percent year-on-year to $2.73 billion. That increase in originations drove an increase in transaction fees, which were up 22 percent to $135.4 million.

For the second quarter, the company expects net revenue between $185 million and $195 million, with the high end slightly below the average analyst estimate of $196.7 million.

Why LendingClub Stock Leapt 12.4% Today (The Motley Fool), Rated: B

Wedbush believes LendingClub’s improving operating efficiency will help it produce an adjusted EBITDA margin of 20% by the end of 2019. The firm also expects LendingClub to grow revenue by 12%-15% annually in the coming years.

LendingClub, GreenSky and OnDeck Q1 2019 Earnings Results (Lend Academy), Rated: AAA

LendingClub

LendingClub rounded out 2018 originating the most loans in the company’s history at $10.9 billion. With their Q1 2019 results, the company is off to a great start in 2019. Originations were $2.7 billion, up 18% year over year. The company reported that application growth was 31% over the same period.

Source: Lend Academy

Net revenues came in above high end guidance of $172 million at $174.4 million for the quarter, up 15% year over year. GAAP Consolidated Net Loss was $(19.9) million, compared to $(31.2) million in Q1 2018. Finally, the company delivered adjusted EBITDA of $22.6, up 47% year over year and well above their projections of $13-$18 million. LendingClub is on track to become adjusted net income profitable over the second half of 2019.

GreenSky Q1 2019 Earnings

In Q1 2019 GreenSky increased transaction volume on the platform 20% to $1.2 billion. They also grew revenue 22% to $103.7 million form the prior year period. GAAP Net Income in Q1 2019 was $7.4 million. The company had aggregate commitments of $11.8 billion from nine bank partners of which $4.5 billion remain unused. The company ended the quarter with $268 million in cash.

Source: Lend Academy

OnDeck Q1 2019 Earnings

Originations fell for the quarter to $636 million compared to $658 million for the previous quarter. This was attributed to OnDeck tightening their credit box during the quarter. The company shared that their line of credit product reached an all time high of $150 million for the quarter.

Strong GDP Growth Continues (PeerIQ Email), Rated: AAA

Unemployment fell to 3.6% – the Online marketplace reaches $ 500M in online real estate investments (Real Estate Weekly), Rated: AAA

CrowdStreet, Inc., a technology provider with an online marketplace for direct equity investment in commercial real estate (CRE), announced that in March it crossed the $500 million threshold in total online investments with a record number of new individual investors.

The news accompanies a record quarter with over $75 million invested.

The Pros And Cons Of Leveraged Loans (Seeking Alpha), Rated: AAA

Corporate America has taken on substantially more debt in the aftermath of the Great Recession. Today, the underlying structure of that leverage looks different. Fewer bonds are being issued. Bank loans to indebted companies now match junk bonds in total issue. This article will review the market for leveraged loans – a marketplace that has grown tenfold in the new millennium and has passed the $1 trillion threshold.

In 2017, nearly 70% of levered loans were refinanced at lower interest rates. That creates a lot of turnover.

BlackRock is building a team of 30 data scientists to create a next-generation stock-lending platform (Business Insider), Rated: A

BlackRock founded a Palo Alto, California-based group called AI Labs last year, directed by the Stanford professor Stephen Boyd. Now, according to job postings reviewed by Business Insider, the 30-member team is tackling projects ranging from next-generation lending platforms to automating human tasks.

ONLINE LENDER SETTLES WITH FTC FOR .85 MILLION (Lawyers and Settlements), Rated: A

Avant LLC, the online lending phenomenon which had previously been hailed as a “breakout financial success story,” has agreed to settle a lawsuit brought by the Federal Trade Commission (FTC) for $3.85 million. Although the lawsuit largely relied on a different federal statute, it shares much of the consumer financial protection zeal of the excessive overdraft fee lawsuits recently leveled against credit unions, banks and payday lenders. But it also reveals shortcomings in federal consumer protection laws.

Providing Additional Liquidity to Some Delinquent Borrowers Can Actually be a Win-Win (Yahoo! Finance), Rated: A

Consumers who fall behind on credit payments may find an unexpected lifeline—another loan from their lender. A new TransUnion (TRU) study found that, in some instances, both lenders and consumers can benefit when additional loans are extended to customers during difficult times. The findings were released today during the 2019 TransUnion Financial Services Summit, attended by more than 300 executives from across the globe.

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