Many lending companies distribute loans based on the credit scores of applicants, which makes applying for a loan an arduous process. Therefore, people tend to find alternative ways to raise money that usually involves paying high interest rates. This can become a huge burden for the recipients, leaving them with very little or no savings—and don’t even get me started on seeking loans and managing debt during college. To address this problem, WeFinance, a peer-to-peer lending platform, has created modern ways to assist borrowers who are seeking loans.
On the WeFinance platform, borrowers can write their own loan applications and link to their Facebook and Linkedin accounts to verify their identity, educational background and work history. From here, the site carefully examines their applications and offers feedback and required changes. Once this is done, the application is approved and goes live on the site. Initially, borrowers seek support from their own network of family and friends to make pledges, which later serves as “social proof” to other potential lenders in making decisions on funding.
WeFinance provides complete assistance to the borrowers by reading their applications, making suggestions on the terms used, and forming batches of similar borrowers so that they can go live on the site at the same time and benefit from the network.
Benefits of applying for loans through this site are:
1) Borrowers can raise money through their peer network quickly, without much of the tedious work that normally accompanies loan applications.
2) They benefit from lower interest rates.
3) The site also helps in refinancing existing debt.
Benefits of lending through WeFinance are:
a) Lenders can help borrowers in a low risk environment.
b) Lenders get a good return on their money, which otherwise is probably just sitting in their savings accounts.
Wefinance was founded in 2014 by Eric Mayefsky—an Ex-Facebook product manager—and Willy Chu, who was previously with Credit Karma and Kiva.org. The company is based out of San Francisco, California. WeFinance’s current focus is on students who borrow loans to fund their educational expenses like tuitions, boot camps, unpaid internships and more. As a starter, the company is assisting borrowers with personal loans ranging between $10,000-$20,000 to fund their educational expenses. Four percent is the interest rate most commonly charged on WeFinance’s loans. WeFinance is preparing for a seed funding round later this year.