Report: Fintech Companies Originated 36% of Total Personal Loans in 2017

This is interesting.

According to a report in Bloomberg, online lending has grown impressively in the past seven years. Quoting data from TransUnion, the write states that Fintech firms originated 36% of all personal loans in 2017. This is in contrast to just under 1% in 2010.

The article states that “online firms have opened the spigot for personal loans, even if it comes at a steep price.”

But the online lending has changed dramaticly in the past few years. Early on, it was dominated by just a few names – the innovative trailblazers. Today, there are a whole squadron of online lenders and banks are moving into the sector recognizing that the future of their business is digital and mobile. Marcus, the emerging money center digital bank created by Goldman Sachs, has originated billions of dollars in personal loans and it is expected to enter new lending verticals in the coming months.

Jason Laky from TransUnion says Fintechs should be recognized for the increase in personal loans;

“A lot of credit goes to the fintech lenders for reinvigorating a loan category that’s been around forever. If you think about ‘It’s a Wonderful Life,’ George Bailey and his bank offered personal loans to the consumers. It’s a core banking product that’s been around since the beginning of banking.”

While many online lenders in the consumer space contrast their service to the much maligned alternative of racking up debt on your credit cards, interest rates have been rising on the lending platforms. Just recently, LendingClub, the largest marketplace lender in the US, boosted its rates across the board. As of June 29, 2018, interest rates on the LendingClub platform saw an increase of between 0.38% and 0.80% depending on the loan grade. Of course, this increase comes at a time when interest rates are rising in general as the Fed tries to keep the economy moving forward without overheating. But as TransUnion aptly states – it is not a bad thing for consumers to have credit options.

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