September 18, 2015
The future of alternative lending is looking bright in the US as well as globally. Nontraditional alternative lending has grown rapidly in the last few years. P2P lending segment emerged first in 2005—focusing on lending and borrowing. P2P lending platforms, also known as marketplace lending platforms, offered an alternative to traditional banking and payment systems, since they cater to the underserved with services like consumer lending, student loans, real estate and small-business lending products. While these online providers create a marketplace for lenders and borrowers, lenders can expect a higher rate of return on their investments compared with traditional bank deposits. Borrowers who are unable to qualify for loans from banks turn to these alternatives to obtain credit—possibly at a lower interest rate than they would have received from their bank, based on their respective credit profiles. LTP brings to you the consolidated list of 25 global Alternative lending startups:
1. SoFi (US): SoFi is a US-based, online, peer-to-peer loan platform that connects students and recent graduates with alumni and institutional investors via school-specific student loan funds. The company has had a strong impact and has gained a large momentum for solving the issue of high interest rates on student/education loans. Some of the investors for the platform are Lakestar, Marco Rossi (VP Service Contracts SBU @ Dresser Rand Group, Inc), Institutional Venture Partners (IVP) and Ron Suber (President @Prosper).
2. Avant (US): Avant’s impact in the personal lending space is marked by its use of latest technology and statistical methods which 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. Major investors for the firm include the names such as Victory Park Capital, DFJ Growth, Jefferies & Company and RRE Ventures.
3. LendKey (US): New York-based company LendKey operates on the model of connecting banks and credit unions with borrowers through online channels. The company provides an end-to-end lending platform, allowing financial institutions to create online lending programs and bring low-cost loans directly to consumers. The company enables this by using a cloud-based platform.