FinTech Lender LendUp Hits $2 Billion in Loans
It seems that, every few months or so, another survey shows that the majority of Americans would be unable to cover an unexpected expense of a few hundred dollars or more. As a result, despite the best efforts of regulators, so-called “payday loans” continue to be a popular albeit expensive choice for consumers. That’s where the FinTech lender LendUp comes in, offering an option for quickly-funded short-term loans meant to compete with the payday lending model. Now the company has revealed that its lending has reached a major milestone.
This week LendUp announced that it had surpassed $2 billion in consumer financing to date. That amounts to 6.5 million loans issued since the company started in 2012. Given the short term nature of LendUps loans, most are relatively small, averaging just $300.
For comparison Lending Club has issued more than $53 billion in loans while Prosper’s total lending now tops $16 billion. Of course both companies have been around far longer than LendUp, launching in 2007 and 2006 respectively. Additionally each of those marketplace lenders traffic in larger loan amounts, with both Lending Club and Prosper allowing borrowers to take out personal loans for as much as $40,000 while LendUp limits most consumer loans to $600.
Not only does LendUp give consumers a transparent and easy loan solution but also provides a number of financial literacy resources. According to the company, its customers have consumed more than two million courses through their educational platform. In these lessons users can learn more about building credit, establishing an emergency fund, and more.
In a press release regarding the milestone, LendUp CEO Anu Shultes said, “We’re very proud of this significant lending accomplishment, the progress we’ve made in driving disciplined, profitable and sustainable growth, and our role as a standard bearer for responsible and inclusive lending and banking.” Commenting on the impact the company has had, Shultes added, “Through our lending, education and savings programs, we’ve helped customers raise their credit profiles by hundreds of thousands of points cumulatively and saved them hundreds of millions of dollars in interest and fees from much higher cost products. While there’s much more for us to accomplish, this milestone is a real testament to the impact that financial service providers like LendUp can and should have on the market.”
Startups like LendUp truly show the potential that FinTech has. Instead of continuing failed attempts to stomp out payday lenders, LendUp and others propose that the solution is providing a better alternative. So although $2 billion might pale in comparison to some of its fellow online lenders, it’s certainly a notable accomplishment for the company.