Online Lending
Client Logo
Online Lending
December 2015 © 2015 Merkle. All Rights Reserved. Confidential
Merkle POV and Commentary The lending space has changed dramatically since ole George Bailey ran the local Savings & Loan, but never so much as in the last two years. A major “disruptive” force in this change is online lenders, aka “shadow banks,” P2P lenders, or Fintech – companies like LendingClub and Prosper. In 2014 alone, venture investment in Fintech tripled to $12.2 billion. According to Goldman Sachs’ “The Future of Finance 2015” report, while it took Prosper eight years to reach the first billion in loans issued via its platform, it took just six months to reach the second billion Over the next 5-10 years, we’ll see this landscape continue to evolve as new entrants emerge and conduct lending activities outside the banking system, if a few large issues continue to be in their favor: Regulation: • Stricter capital requirements of banks, along with tighter regulations that are not applicable to non-banks, provide an opportunity for these entities to provide lending with less documentation and in a more automated fashion (lower cost and faster delivery)…for now. • Banks have had to tighten credit boundaries and are limited to higher grade credit customers, basically giving more leveraged borrowers to the non-banks. Technology: • Because the leaders of these companies are tech focused rather than finance focused, they are more largely committed to satisfying the consumer need for speed and “painless” interaction. • They understand how to use technology and data to intersect these two demands to create a better experience than the firms holding the largest share. Their technology-friendly DNA enables them to innovate faster than traditional banks can evolve. Borrower Attitudes: • Especially in borrowing money, borrowers prefer impersonal interaction, almost to the point of anonymity. They are not concerned with having a “relationship” for lending. As long as the process is easy to apply, quick to answer, and the lender actually lends the funds, borrowers actually prefer not to have personal interaction – even at a higher cost of interest.
Diana Tummillo © 2015 Merkle. All Rights Reserved. Confidential
2
Vice President, Retail Banking and Consumer Finance
Merkle POV and Commentary (Continued) What does this mean for the future? • Lending revenue at risk for banks: In 2014, banks earned ~$150B from lending activities across consumer, small business, leveraged, mortgage, commercial real estate, and student lending. It is estimated that 7%, or $11B, of annual profit from lending could be at risk from these new players entering the marketplace (Goldman Sachs 2015). This outlook is creating pressure for banks to understand what borrowers want (speed/automation/approval) and quickly adapt to defend their market share, remain competitive, and grow. • Banks are one of the largest lobbies in Washington, so don’t think that they won’t push for non-banks to be regulated in a way that is commiserate with their own plight. Some larger online lenders are already under watch by the Financial Stability Oversight Council (FSOC) and could be forced to conform to regulatory measures. Additionally, banks may begin to put pricing pressure on the non-banks, particularly if they can keep deposit rates low. Banks are not going to allow continued loss of much-needed lending revenue to persist. • Most banks are frantically trying to upgrade technology to provide ease and quickness, and some are even partnering with nonbanks to be a lending interface. However, bank tech is a bigger issue than just lending. There is a desperate need within banks to provide customers with better information/education, quicker service, and more relevant interaction to protect and grow longterm relationships, particularly among more valuable customers. Banks are making headway. • New entrants in the lending space is not a new phenomenon; however, there is concern for how long these growth trends will last. The past has shown that new lending players have caused traditional banking to reduce pricing, acquire or build similar platforms, and push for additional regulatory scrutiny of these entrants to “level the playing field.” And, for the most part, banks have succeeded in the past. The question is how quickly they can close the gaps. Fintech has definitely exploded as a viable borrowing option for many. However, they may be on “borrowed” time if they are eventually held to tighter regulations on par with banks and if borrowers feel that they can receive comparable pricing and experience with traditional banks (a name they know and trust). In the meantime, this niche in the financial services industry will continue to grow and thrive.
Diana Tummillo © 2015 Merkle. All Rights Reserved. Confidential
3
Vice President, Retail Banking and Consumer Finance
Investment in FinTech Ventures Tripled to $12.21 Billion in 2014 Global financial technology (FinTech) investment jumped 201% between 2013 and 2014, breaking the $12 billion mark across more than 730 deals. The U.S. makes up the majority share, but Europe experienced the highest level of growth with an increase of 215% (year-over-year).
Global FinTech Financing Activity
Source: www.cbinsights.com/blog/fintech-and-banking-accenture/ © 2015 Merkle. All Rights Reserved. Confidential
4
A $870+ Billion Industry: Lending is Ripe for Disruption According to estimates from Foundation Capital, banks, credit cards and other lending institutions generate $870+ billion each year in fees and interest from over $3.2 trillion in lending activity. Currently, less than 2% of lending revenue is being captured by marketplace lenders in all verticals. The future belongs to online marketplace platforms that will remake the industry by developing more efficient lending practices. ANNUAL LENDING REVENUES IN 2013 US$B
Source: Foundation Capital Report: “A Trillion Dollar Market By the People, For the People: How Marketplace Lending Will Remake Banking As We Know It” © 2015 Merkle. All Rights Reserved. Confidential
5
The Growth of P2P Platforms Last year more than $8.9 billion in loans were made through peer-to-peer (P2P) lending platforms and more than $1.32 billion in venture capital money was invested in these platforms. Given that the popularity (and number of) P2P platforms is growing exponentially, and the fact that most analysts predict that the industry will grow to over $500 billion – $1 trillion in the next, this investment trend shows no signs of slowing in the foreseeable future. Marketplace Lending in 2014
Source: www.crowdfundinsider.com/2015/04/66230-p2p-lending-platforms-big-money-investors-looking-for-piece-of-the-pie/ 6 © 2015 Merkle. All Rights Reserved. Confidential
P2P Lenders Have Experienced Tremendous Growth in Originations The new entrants are P2P lenders such as Lending Club and Prosper, both of which have seen tremendous growth. While it took Prosper eight years to reach the first $1 billion loans issued via its P2P lending platform, it took just six months to reach the second billion.
P2P Lender Originations
Source: Goldman Sach’s The Future of Finance (2015) Report © 2015 Merkle. All Rights Reserved. Confidential
7
Online Lending Landscape In addition to Lending Club and Prosper, other marketplace lenders have also emerged. These include SoFi and CommonBond for student loans and Kabbage, OnDeck, and Funding Circle for SMB loans. Even companies like PayPal and Square have started to offer direct loans to their customers.
Source: Foundation Capital Report: “A Trillion Dollar Market By the People, For the People: How Marketplace Lending Will Remake Banking As We Know It” © 2015 Merkle. All Rights Reserved. Confidential
8
Non-Banks in the Student Loan Market Student loans have grown faster than any other financial asset class since the recession, with originations growing 15% and the national amount outstanding exceeding $1.2 trillion. The government’s one-size-fits-all Direct Loan program, which has no underwriting and offers the same interest rate to essentially all borrowers, has accounted for most of the growth, creating an opportunity for tech start-ups to refinance those loans.
Comparison of Non-Banks and Banks in the Student Loan Market
“With more students graduating with debt each semester, the addressable market will continue to grow, further fueling the expansion of the student loan refinancing industry.” - Goldman Sach’s The Future of Finance (2015) Report Source: Goldman Sach’s The Future of Finance (2015) Report © 2015 Merkle. All Rights Reserved. Confidential
9
Sizing the Student Loan Refinance Opportunity According to Goldman Sach’s The Future of Finance (2015) report, out of the $211 billion in student loan debt estimated to qualify for refinancing, it is estimated that only $3–4 billion, or less than 2%, has actually been refinanced. Overall, the report estimates $200 million of profit could shift outside of the banking system over the next 3 years, primarily due to divestitures, but also partly due to refinance activity of start-ups. $65 Billion of Loans and $705 Million of Profits at Risk of Leaving Banks
Source: Goldman Sach’s The Future of Finance (2015) Report © 2015 Merkle. All Rights Reserved. Confidential
10
Top Players
© 2015 Merkle. All Rights Reserved. Confidential
11
Top Players While it is a challenge to capture all of the new entrants in the online lending, Merkle actively tracks this space. Here is only a sampling of the all the players in the online lending market today. Company
Area of Focus
Product Offerings
Media Channels
Lending Club
Unsecured Lending
Personal loans, debt consolidation loans, home improvement loan, pool loan, car loan, small business loans
DM. EM, Online
Prosper
Unsecured Lending
Debt consolidation loans, home improvement loan, personal loans for business use, auto loans, short-term & bridge loans, green loans, baby & adoption loans, engagement ring financing, special occasion loans, friends & family loans, military loans
DM, EM, Online
AvantCredit
Unsecured Lending
Debt consolidation loan, home improvement loan, emergencies loan, personal loans
DM, Mobile, Online
Quicken Loans
Mortgage
Agency loans, FHA loans, VA loans, JUMBO, Mortgage First, YOURgage, HARP loans, ARMs, mortgage refinance loans, FHA refinance loans
DM, EM, Online, Mobile
SoFi
Student Lending Mortgage
Student loan refinance MBA and undergrad, new student loans MBAs, mortgage loans, personal loans, parent plus loans
DM, EM, Online, Print
CommonBond
Student Lending
Graduate and undergraduate student loan refinance
DM, Online, Mobile
Earnest
Student Lending
Graduate and undergraduate student loan refinance and personal loans
Email, Online, Mobile
Upstart
Personal Loans Education Finance
Personal loans, education loans
DM, Online, Mobile
Source: CompereMedia and MoatPro
© 2015 Merkle. All Rights Reserved. Confidential
12
Lending Club Lending Club recently announced that it had reached $11 billion in loans on its platform. As the world’s largest P2P lending platform, Lending Club started with one simple mission: to create a more efficient, transparent and customer-friendly alternative that offers creditworthy borrowers lower interest rates and investors better returns.
Source: KPMG Report: The 50 Best FinTech Innovators Report (2014) © 2015 Merkle. All Rights Reserved. Confidential
13
Prosper Prosper is America’s first P2P lending marketplace that offers consumers access to loans based on their personal credit for the purpose of debt consolidation, large purchases, medical expenses and new businesses. Prosper issued loans worth $912.4 million in Q2 2015, up 147% from Q2 2014.
Source: KPMG Report: The 50 Best FinTech Innovators Report (2014) © 2015 Merkle. All Rights Reserved. Confidential
14
AvantCredit AvantCredit’s impact in the personal lending space is marked by its use of latest technology and statistical methods that help the company meet customers’ unique financial needs and also offer lower interest rates compared to competitors. To set the ground stronger, Avant has acquired ReadyForZero, which creates online financial software for actively managing personal debt and credit.
Source: http://letstalkpayments.com/25-global-alternative-lending-startups-to-watch-out-for/ © 2015 Merkle. All Rights Reserved. Confidential
15
Quicken Loans Quicken Loans is the nation’s largest online retail mortgage lender and the second largest retail mortgage lender in the U.S. Quicken’s market share has quintupled to 5% since 2008, and it is now the third largest mortgage originator in the U.S. (and the largest online lender). Quicken Loans has closed $200 billion of mortgage volume across all 50 states since 2013.
Source: www.quickenloans.com © 2015 Merkle. All Rights Reserved. Confidential
16
Social Finance (SoFi) SoFi is an online, P2P loan platform that connects students and recent graduates with alumni and institutional investors via school-specific student loan funds. SoFi’s core business lies in offering refinancing options for graduate and undergraduate students but the company has also expanded its footprint into other areas such as mortgages and personal loans. It offers multiple repayment options, including deferred, interest only, and full principal and interest-only payments. SoFi also offers career support services such as interview coaching and resume review for its customers.
© 2015 Merkle. All Rights Reserved. Confidential
17
CommonBond CommonBond is a New York-based company that started in 2012. The company’s operations bring along a strong focus around education refinancing and enables the loan disbursement at APRs as low as 1.93%.
Source: http://letstalkpayments.com/25-global-alternative-lending-startups-to-watch-out-for/ © 2015 Merkle. All Rights Reserved. Confidential
18
Earnest Earnest launched a student loan refinancing service offering loans with lower annual payment rates. The online service is also instantly flexible, with options to change the rates of repayment at automatically reduced rates based on a user’s decisions. The company estimates that they can save college students roughly $12,500 on average, compared with traditional refinancing options.
Source: “New Loan Refinancing Tool And $17M Round Shows The Importance Of Earnest.” Tech Crunch. January 27, 2015. © 2015 Merkle. All Rights Reserved. Confidential
19
Upstart Upstart is a new company that provides personal loans with no credit required. It is geared toward college graduates with good jobs who can’t get approved for traditional loans or credit cards because they haven’t used credit long enough.
Using large datasets and debt-to-income ratio, Upstart draws correlations between educational factors and the likelihood that someone can and will repay a loan.
Source: “New Loan Refinancing Tool And $17M Round Shows The Importance Of Earnest.” Tech Crunch. January 27, 2015. © 2015 Merkle. All Rights Reserved. Confidential
20
Thank You!
Alison Berman Senior Market Research Manager [email protected] MERKLE, Inc. www.merkleinc.com Twitter @merkleCRM
merkleinc.com © 2015 Merkle. All Rights Reserved. Confidential
Online Lending
December 2015 © 2015 Merkle. All Rights Reserved. Confidential
Merkle POV and Commentary The lending space has changed dramatically since ole George Bailey ran the local Savings & Loan, but never so much as in the last two years. A major “disruptive” force in this change is online lenders, aka “shadow banks,” P2P lenders, or Fintech – companies like LendingClub and Prosper. In 2014 alone, venture investment in Fintech tripled to $12.2 billion. According to Goldman Sachs’ “The Future of Finance 2015” report, while it took Prosper eight years to reach the first billion in loans issued via its platform, it took just six months to reach the second billion Over the next 5-10 years, we’ll see this landscape continue to evolve as new entrants emerge and conduct lending activities outside the banking system, if a few large issues continue to be in their favor: Regulation: • Stricter capital requirements of banks, along with tighter regulations that are not applicable to non-banks, provide an opportunity for these entities to provide lending with less documentation and in a more automated fashion (lower cost and faster delivery)…for now. • Banks have had to tighten credit boundaries and are limited to higher grade credit customers, basically giving more leveraged borrowers to the non-banks. Technology: • Because the leaders of these companies are tech focused rather than finance focused, they are more largely committed to satisfying the consumer need for speed and “painless” interaction. • They understand how to use technology and data to intersect these two demands to create a better experience than the firms holding the largest share. Their technology-friendly DNA enables them to innovate faster than traditional banks can evolve. Borrower Attitudes: • Especially in borrowing money, borrowers prefer impersonal interaction, almost to the point of anonymity. They are not concerned with having a “relationship” for lending. As long as the process is easy to apply, quick to answer, and the lender actually lends the funds, borrowers actually prefer not to have personal interaction – even at a higher cost of interest.
Diana Tummillo © 2015 Merkle. All Rights Reserved. Confidential
2
Vice President, Retail Banking and Consumer Finance
Merkle POV and Commentary (Continued) What does this mean for the future? • Lending revenue at risk for banks: In 2014, banks earned ~$150B from lending activities across consumer, small business, leveraged, mortgage, commercial real estate, and student lending. It is estimated that 7%, or $11B, of annual profit from lending could be at risk from these new players entering the marketplace (Goldman Sachs 2015). This outlook is creating pressure for banks to understand what borrowers want (speed/automation/approval) and quickly adapt to defend their market share, remain competitive, and grow. • Banks are one of the largest lobbies in Washington, so don’t think that they won’t push for non-banks to be regulated in a way that is commiserate with their own plight. Some larger online lenders are already under watch by the Financial Stability Oversight Council (FSOC) and could be forced to conform to regulatory measures. Additionally, banks may begin to put pricing pressure on the non-banks, particularly if they can keep deposit rates low. Banks are not going to allow continued loss of much-needed lending revenue to persist. • Most banks are frantically trying to upgrade technology to provide ease and quickness, and some are even partnering with nonbanks to be a lending interface. However, bank tech is a bigger issue than just lending. There is a desperate need within banks to provide customers with better information/education, quicker service, and more relevant interaction to protect and grow longterm relationships, particularly among more valuable customers. Banks are making headway. • New entrants in the lending space is not a new phenomenon; however, there is concern for how long these growth trends will last. The past has shown that new lending players have caused traditional banking to reduce pricing, acquire or build similar platforms, and push for additional regulatory scrutiny of these entrants to “level the playing field.” And, for the most part, banks have succeeded in the past. The question is how quickly they can close the gaps. Fintech has definitely exploded as a viable borrowing option for many. However, they may be on “borrowed” time if they are eventually held to tighter regulations on par with banks and if borrowers feel that they can receive comparable pricing and experience with traditional banks (a name they know and trust). In the meantime, this niche in the financial services industry will continue to grow and thrive.
Diana Tummillo © 2015 Merkle. All Rights Reserved. Confidential
3
Vice President, Retail Banking and Consumer Finance
Investment in FinTech Ventures Tripled to $12.21 Billion in 2014 Global financial technology (FinTech) investment jumped 201% between 2013 and 2014, breaking the $12 billion mark across more than 730 deals. The U.S. makes up the majority share, but Europe experienced the highest level of growth with an increase of 215% (year-over-year).
Global FinTech Financing Activity
Source: www.cbinsights.com/blog/fintech-and-banking-accenture/ © 2015 Merkle. All Rights Reserved. Confidential
4
A $870+ Billion Industry: Lending is Ripe for Disruption According to estimates from Foundation Capital, banks, credit cards and other lending institutions generate $870+ billion each year in fees and interest from over $3.2 trillion in lending activity. Currently, less than 2% of lending revenue is being captured by marketplace lenders in all verticals. The future belongs to online marketplace platforms that will remake the industry by developing more efficient lending practices. ANNUAL LENDING REVENUES IN 2013 US$B
Source: Foundation Capital Report: “A Trillion Dollar Market By the People, For the People: How Marketplace Lending Will Remake Banking As We Know It” © 2015 Merkle. All Rights Reserved. Confidential
5
The Growth of P2P Platforms Last year more than $8.9 billion in loans were made through peer-to-peer (P2P) lending platforms and more than $1.32 billion in venture capital money was invested in these platforms. Given that the popularity (and number of) P2P platforms is growing exponentially, and the fact that most analysts predict that the industry will grow to over $500 billion – $1 trillion in the next, this investment trend shows no signs of slowing in the foreseeable future. Marketplace Lending in 2014
Source: www.crowdfundinsider.com/2015/04/66230-p2p-lending-platforms-big-money-investors-looking-for-piece-of-the-pie/ 6 © 2015 Merkle. All Rights Reserved. Confidential
P2P Lenders Have Experienced Tremendous Growth in Originations The new entrants are P2P lenders such as Lending Club and Prosper, both of which have seen tremendous growth. While it took Prosper eight years to reach the first $1 billion loans issued via its P2P lending platform, it took just six months to reach the second billion.
P2P Lender Originations
Source: Goldman Sach’s The Future of Finance (2015) Report © 2015 Merkle. All Rights Reserved. Confidential
7
Online Lending Landscape In addition to Lending Club and Prosper, other marketplace lenders have also emerged. These include SoFi and CommonBond for student loans and Kabbage, OnDeck, and Funding Circle for SMB loans. Even companies like PayPal and Square have started to offer direct loans to their customers.
Source: Foundation Capital Report: “A Trillion Dollar Market By the People, For the People: How Marketplace Lending Will Remake Banking As We Know It” © 2015 Merkle. All Rights Reserved. Confidential
8
Non-Banks in the Student Loan Market Student loans have grown faster than any other financial asset class since the recession, with originations growing 15% and the national amount outstanding exceeding $1.2 trillion. The government’s one-size-fits-all Direct Loan program, which has no underwriting and offers the same interest rate to essentially all borrowers, has accounted for most of the growth, creating an opportunity for tech start-ups to refinance those loans.
Comparison of Non-Banks and Banks in the Student Loan Market
“With more students graduating with debt each semester, the addressable market will continue to grow, further fueling the expansion of the student loan refinancing industry.” - Goldman Sach’s The Future of Finance (2015) Report Source: Goldman Sach’s The Future of Finance (2015) Report © 2015 Merkle. All Rights Reserved. Confidential
9
Sizing the Student Loan Refinance Opportunity According to Goldman Sach’s The Future of Finance (2015) report, out of the $211 billion in student loan debt estimated to qualify for refinancing, it is estimated that only $3–4 billion, or less than 2%, has actually been refinanced. Overall, the report estimates $200 million of profit could shift outside of the banking system over the next 3 years, primarily due to divestitures, but also partly due to refinance activity of start-ups. $65 Billion of Loans and $705 Million of Profits at Risk of Leaving Banks
Source: Goldman Sach’s The Future of Finance (2015) Report © 2015 Merkle. All Rights Reserved. Confidential
10
Top Players
© 2015 Merkle. All Rights Reserved. Confidential
11
Top Players While it is a challenge to capture all of the new entrants in the online lending, Merkle actively tracks this space. Here is only a sampling of the all the players in the online lending market today. Company
Area of Focus
Product Offerings
Media Channels
Lending Club
Unsecured Lending
Personal loans, debt consolidation loans, home improvement loan, pool loan, car loan, small business loans
DM. EM, Online
Prosper
Unsecured Lending
Debt consolidation loans, home improvement loan, personal loans for business use, auto loans, short-term & bridge loans, green loans, baby & adoption loans, engagement ring financing, special occasion loans, friends & family loans, military loans
DM, EM, Online
AvantCredit
Unsecured Lending
Debt consolidation loan, home improvement loan, emergencies loan, personal loans
DM, Mobile, Online
Quicken Loans
Mortgage
Agency loans, FHA loans, VA loans, JUMBO, Mortgage First, YOURgage, HARP loans, ARMs, mortgage refinance loans, FHA refinance loans
DM, EM, Online, Mobile
SoFi
Student Lending Mortgage
Student loan refinance MBA and undergrad, new student loans MBAs, mortgage loans, personal loans, parent plus loans
DM, EM, Online, Print
CommonBond
Student Lending
Graduate and undergraduate student loan refinance
DM, Online, Mobile
Earnest
Student Lending
Graduate and undergraduate student loan refinance and personal loans
Email, Online, Mobile
Upstart
Personal Loans Education Finance
Personal loans, education loans
DM, Online, Mobile
Source: CompereMedia and MoatPro
© 2015 Merkle. All Rights Reserved. Confidential
12
Lending Club Lending Club recently announced that it had reached $11 billion in loans on its platform. As the world’s largest P2P lending platform, Lending Club started with one simple mission: to create a more efficient, transparent and customer-friendly alternative that offers creditworthy borrowers lower interest rates and investors better returns.
Source: KPMG Report: The 50 Best FinTech Innovators Report (2014) © 2015 Merkle. All Rights Reserved. Confidential
13
Prosper Prosper is America’s first P2P lending marketplace that offers consumers access to loans based on their personal credit for the purpose of debt consolidation, large purchases, medical expenses and new businesses. Prosper issued loans worth $912.4 million in Q2 2015, up 147% from Q2 2014.
Source: KPMG Report: The 50 Best FinTech Innovators Report (2014) © 2015 Merkle. All Rights Reserved. Confidential
14
AvantCredit AvantCredit’s impact in the personal lending space is marked by its use of latest technology and statistical methods that help the company meet customers’ unique financial needs and also offer lower interest rates compared to competitors. To set the ground stronger, Avant has acquired ReadyForZero, which creates online financial software for actively managing personal debt and credit.
Source: http://letstalkpayments.com/25-global-alternative-lending-startups-to-watch-out-for/ © 2015 Merkle. All Rights Reserved. Confidential
15
Quicken Loans Quicken Loans is the nation’s largest online retail mortgage lender and the second largest retail mortgage lender in the U.S. Quicken’s market share has quintupled to 5% since 2008, and it is now the third largest mortgage originator in the U.S. (and the largest online lender). Quicken Loans has closed $200 billion of mortgage volume across all 50 states since 2013.
Source: www.quickenloans.com © 2015 Merkle. All Rights Reserved. Confidential
16
Social Finance (SoFi) SoFi is an online, P2P loan platform that connects students and recent graduates with alumni and institutional investors via school-specific student loan funds. SoFi’s core business lies in offering refinancing options for graduate and undergraduate students but the company has also expanded its footprint into other areas such as mortgages and personal loans. It offers multiple repayment options, including deferred, interest only, and full principal and interest-only payments. SoFi also offers career support services such as interview coaching and resume review for its customers.
© 2015 Merkle. All Rights Reserved. Confidential
17
CommonBond CommonBond is a New York-based company that started in 2012. The company’s operations bring along a strong focus around education refinancing and enables the loan disbursement at APRs as low as 1.93%.
Source: http://letstalkpayments.com/25-global-alternative-lending-startups-to-watch-out-for/ © 2015 Merkle. All Rights Reserved. Confidential
18
Earnest Earnest launched a student loan refinancing service offering loans with lower annual payment rates. The online service is also instantly flexible, with options to change the rates of repayment at automatically reduced rates based on a user’s decisions. The company estimates that they can save college students roughly $12,500 on average, compared with traditional refinancing options.
Source: “New Loan Refinancing Tool And $17M Round Shows The Importance Of Earnest.” Tech Crunch. January 27, 2015. © 2015 Merkle. All Rights Reserved. Confidential
19
Upstart Upstart is a new company that provides personal loans with no credit required. It is geared toward college graduates with good jobs who can’t get approved for traditional loans or credit cards because they haven’t used credit long enough.
Using large datasets and debt-to-income ratio, Upstart draws correlations between educational factors and the likelihood that someone can and will repay a loan.
Source: “New Loan Refinancing Tool And $17M Round Shows The Importance Of Earnest.” Tech Crunch. January 27, 2015. © 2015 Merkle. All Rights Reserved. Confidential
20
Thank You!
Alison Berman Senior Market Research Manager [email protected] MERKLE, Inc. www.merkleinc.com Twitter @merkleCRM
merkleinc.com © 2015 Merkle. All Rights Reserved. Confidential
