Student loan refinancing and consumer lending platform LendKey has announced the successful underwriting, origination, and deployment of more than $1 billion to borrowers since inception. The company has not provided a specific volume figure, but revealed that private student loan and student refinancing opportunities comprised the majority of deployed funds.
Founded in 2009 and operating in New York and Cincinnati, LendKey offers consumers financing opportunities for a wide array of purposes, including, for example, the paying of tuition fees and buying homes and cars. The platform has a slightly different business model from a traditional marketplace lender, as its mission is to connect borrowers with local banks and credit unions. The company has over 300 originators – including traditional asset managers – signed up as partners to lend to different kinds of borrowers and to achieve a potentially high financial return.
“For years, online lending has been lumped into the alternative financing category. This was done, and rightly so, to cover a host of new entrants delivering credit products in environments where traditional lenders were not as active. But as we break the billion-dollar watermark on deployment for our bank and credit union clients, it’s clear that online lending is no longer ‘alternative’—it’s simply what borrowers have come to expect at any stage of their credit journey—access, speed, and transparency."
The platform caters mostly to young people, who are on average 28 years old, with varying FICO scores, underwriting requirements and diversification goals. According to LendKey, Millennials have better financial habits than baby boomers (the previous generation). 67% of Millennials are able to stick to a budget, while baby boomers lagged behind in this category at just 55%.
Mike Stallmeyer, Chief Operating Officer and Co-Founder of Lendkey, concluded:
“Younger borrowers are the key to long-term viability for any financial institution. As we continue to gain momentum and deploy more capital for our lenders, it’s clear that online lending is part of the experience that borrowers want and need—even when they first jump into credit products on their own, or to better match their goals and wallets down the line.”