Who provides a private label consumer subprime lending platform for products such as auto lending, personal loans, credit cards, etc?

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Who provides a private label consumer subprime lending platform for products such as auto lending, personal loans, credit cards, etc?

Hello! Thanks for your question about private label consumer subprime lending platforms. The most useful sources I found to answer your question are “Kabbage Platform Lending” at kabbageplatform.com and “LendKey Lending Platform” at lendkey.com. The short version is that this report provides information about five consumer lending platforms that could provide turnkey lending solutions for you and your clients. An additional two platforms which may not fit all your desired criteria are provided as possibilities and examples. Below you will find a deep dive of my findings.

KABBAGE

Kabbage provides a fully automated online lending platform. In the past four years, the Kabbage platform has originated over $1 billion in loans. They state that they can deliver consumer loans using your private brand. Kabbage also has their own brand, Karrot, through which they offer consumer loans up to $35,000.

Through their platform, Kabbage says that the average processing time to complete an application and attain access to funds is seven minutes. Customers have a totally automated experience 95% of the time.

Perhaps the most attractive aspect of Kabbage is the configurability of the platform. Kabbage states " We configure our platform’s automated technology, user experience and servicing to provide a turnkey solution that meets each organization's unique needs." This turnkey solution could include configuration to only include subprime lending.

Some of the other relevant benefits that Kabbage offers include:

-Advanced technology: "reviews thousands of customer data points instantly to inform accurate underwriting and funding"

-True automation: " automation driven by data and technology – from initial decisioning through risk monitoring, payments, communications, servicing and beyond"

-Proven risk models: " a rich history of data modeling and will collaborate with your organization to construct a risk model that achieves your business’s goals"

Kabbage also provides a customer service platform that they call Kore. This platform will allow you to provide outstanding customer service to your clients. It includes features such as adjusting rates and terms, managing collections, and viewing user sessions.

In summary, Kabbage offers everything you need for a consumer subprime lending platform. The $1 billion in loan originations using the Kabbage platform over the past four years is impressive.

LENDKEY

LendKey provides a platform that they characterize as a "turnkey lending-as-a-service platform". Their online lending platform includes demand generation, online decisioning, loan servicing, and balance management. LendKey estimates that they can have your customized platform in place within four weeks.

LendKey considers their platform to be transformational. Their technology is designed to match consumers with lenders through creation of "transparent, accessible, and low-cost" loans. On their website, they mention auto loans, personal loans, home improvement loans, and student loans. Their solutions focus keenly on low interest loans for consumers.

In summary, LendKey is attractive primarily because of its focus on using local banks and not-for-profit lenders such as credit unions. This focus will yield low interest and subprime loans for consumers.

CL MARKETPLACE

CL Marketplace is a cloud-based platform for marketplace lenders. They state that, with their platform, you can " manage the loan cycles from online origination, loan grading and marketplace funding to fractional investing and fractional payments".

The CL Marketplace platform is an "end-to-end" lending platform. It includes functions such as loan origination, underwriting, loan services, and collections. All lending operations are covered by the single system of records provided by the platform.

CL Marketplace connects to a diverse lending base, ensuring that your clients should get the lowest possible interest rates. Lenders include "banks, credit unions, traditional finance companies, online lenders, and marketplace platforms."

One of the users of the CL Marketplace platform was Harmoney in New Zealand. CL's advantages for Harmoney included it's security, flexibility, scalability, rapid implementation, and cost-effectiveness. Harmoney was able to enter the market quickly in 2015, and has experienced tremendous growth while using the CL Marketplace platform.

ORCHARD

Orchard is an integrated lending platform for loan originators. Orchard states that their platform empowers originators to "more efficiently and intelligently participate in marketplace lending."

Market insights provided through the Orchard platform include:

-Monthly Industry Report. This tool standardizes, analyzes, and organizes voluminous data so that loan originators can see important trends, benchmarks, and other key statistics.

-Benchmarking. This tool measures overall performance of consumer loans and give originators a benchmark.

Orchard also provides data management tools such as a portfolio dashboard and an investor daily platform holdings report. Other aspects of data management include data integration and standardization, data sharing best practices and permissions, and data security.

One of the positives for Orchard is that you can scale your lending business with their platform. However, Orchard does appear to be more limited, and might not be able to provide the turnkey platform you need. I was not able to determine whether they would offer targeting of sub-prime or low interest loans.

CORTEX

The Cortex platform from Think Finance has the slogan, "Transforming online lending through digital innovation". Cortex recognizes that consumer use of online lending platforms is rising rapidly. Consumers want fast and easy, but secure, access to loans. The Cortex platform is targeted for this consumer online loan market.

Cortex says that their platform is a "customizable, end-to-end lending solution that includes website integration, a powerful Fintech decision engine, and a loan management system built to facilitate online lending." You should be able to work with Cortex to tailor this platform to target low interest and sub-prime lenders.

Cortex sites its "critical modules" as a "user-friendly website", "robust loan originations", "automated loan servicing", and "simplified reporting". They also offer risk management, consumer marketing, compliance management, customer service, and collections.

MARCUS

In October, 2016, Goldman Sachs launched its consumer lending platform, which they named Marcus. Marcus is targeted for middle class consumers, somewhat outside the normal base for Goldman Sachs. Marcus is apparently trying to tap into the "sweet spot" targeted by online lenders such as Lending Club and Prosper.

The Marcus website includes a loan calculator that a consumer can use to evaluate loan options. Loan amounts vary from $3,500 to $30,000. Marcus will then tell the consumer various options that are available for low cost, no-fee loans. The website says that Marcus will give the consumer "Lower, fixed interest rates help you save more and pay off your higher-interest debt faster."

The Marcus platform may be limited to Goldman Sachs, and may not be available for private label users. However, I included it in this report so you could see how it is structured.

ENCOMPASS

The Encompass lending platform is a product of EllieMae, and may be targeted primarily toward mortgage loans. However, the Encompass website states that " The Encompass Lending Platform allows lenders, service providers, and independent software vendors the ability to build custom applications in the cloud, integrate external systems and data, and extend Encompass®". If the platform is not customizable enough to fit personal, auto, or other consumer loans, it could still serve as an example of a consumer lending platform.

Encompass says that, with their platform, lenders, partners, and third-party providers can "innovate faster, access data easier, extend visibility, establish consistency, improve collaboration, and widen competitive advantage."

Benefits of the Encompass Consumer Connect module of the Encompass platform include allowing consumers to complete their own applications, faster loan closing, and closer connection of consumers to your brand. Consumers can access the platform from a desktop, laptop, tablet, or smartphone. Consumers can "conduct research, access rates, and request information 24/7".

CONCLUSION

To wrap it up, I have provided five consumer lending platforms which can be customized to provide turnkey platforms to meet your needs. Each of the five platforms either already focus on low-interest and subprime loans, or could be tailored for this sector. My opinion is that the first three platforms listed, Kabbage, LendKey, and CL Marketplace would be excellent platforms for your situation.

I have also provided two other examples of platforms that are used for consumer lending, but may not be customizable enough to completely meet your needs, but provide good examples of consumer lending platforms in general.

Thanks for using Wonder! Please let us know if we can help with anything else!

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