I was first exposed to online lending in 2008. It led to an interest in raising capital and eventually managing a loan portfolio on behalf of a lending partner.
Since 2008, a lot has changed in the industry. Online lending has become more mainstream and more secure. Regulators have played an important role in making sure lead companies, lenders, and servicing companies adhere to industry best practices. Players such as Lending Club have emerged.
We are thrilled to be a part of an exciting and growing industry. Our niche at ExtraFunds is that we not only know how to make and service loans for our lending partners, but we do so with great respect and courtesy. With our lending partners, we have firmly decided to never sell our customers’ debt. We believe in never reporting negative payment history to credit bureaus. We never secure debt or garnish wages or harass customers.
Simply put, our niche is that we really believe in trying to help our customers. For some, this may be hard to believe, since online installment lending is sometimes viewed controversially and is associated with high interest. But, most people for and against such loans, all seem to continue to agree — there is a need and a demand for the product.
You may be surprised to know that we agree that installment loans are often too expensive. This is why we recommend that our customers always seek alternative, cheaper forms of credit first, IF they have access.
One reason installment loans cost more is because it costs an average of $105 for us to find a new customer. Our first loans are usually $300 or less. A certain percentage of our customers default on their loans at various points throughout their repayment payment cycle. All of this unfortunately increases our overall costs.
Our goal is to continue to lower the costs of loan products in order to lower the costs to borrowers. We will work with our lending partners until we are successful in this goal!
We are also committed to continuing to assist borrowers in any way we can to help them graduate to better financial products at lower interest rates.
If you’re new to ExtraFunds, thanks for reading and for considering a relationship with us whether as a borrower or as an investor. Either way, we are committed to your success!