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Personal loans have long been thought of as a last resort when unexpected costs or major life events come up. However, the rise of alternative lending has changed the way consumers think of this option.
Born of necessity
The main reason for the alternative lending boom? Simple necessity. In the aftermath of the Financial Crisis, banks faced tougher lending regulations, opening up a market for newer, disruptive platforms. Companies like Lending Club and OnDeck have already gone public and more IPOs are expected in the future. Foundation Capital, in fact, puts the industry’s absolute value at $1 trillion. The convenience, transparency and hands-on nature of alternative lending technology has also transformed the process of taking out a personal loan. Before, a personal loan required taking a trip to the bank, dealing with bank personnel, filling out tedious paperwork and hoping for the best. The only way to ensure you are getting the best rate available means- you would need to rinse and repeat this process at various banks. It’s understandable, then, that the idea of taking out a personal loan to pay for something like a family vacation is not part of Americans’ current lexicon. In the past, by the time borrowers got through with the hassle involved in rate shopping, they likely needed funding for another vacation.
A shift in thinking
Statistics generated by alternative lenders such as LendingClub show that borrowers’ attitudes toward personal loans have changed. These loans are no longer looked at as a last resort to be avoided unless absolutely necessary. Lending Club’s loan issuance statistics highlight the shift in thinking toward personal loans. In addition to taking out personal loans to pay off high-interest credit card debt or refinance and consolidate existing debt, more than 1 out of every 4 Lending Club customers now use personal loans to pay for vacations, car financing, medical expenses, home improvements, or other common everyday expenses.
Real world benefits
There are several real world benefits of alternative personal loans, including home improvements. More than $11.9 million of LendingClub’s loans in Q3 of 2015 were used for this category, for example. Perhaps borrowers now realize that smart home improvements can often be closer to an investment than an expense. In addition, personal loans are often used for a wide range of other big expenses. Rather than making five or more different credit card payments per month at much higher interest rates, a single personal loan can consolidate credit card debt at a lower rate. Weddings are another category where personal loans are becoming increasingly more common. The average cost of a wedding is around $30,000. Without help from loved ones, or a sizeable savings account you may not be able to front the entire cost but a personal loan can help ensure that you get the wedding of your dreams without budget-related sacrifices. But that’s not all. Often times, big expenses can come out of nowhere and instantly create financial chaos in your life. A personal loan can be the saving grace when unexpected medical or funeral expenses arise or if insurance doesn’t completely cover damages from a fire or other natural disaster. Applying for an alternative loan can allow you to manage these unexpected expenses quickly and responsibly.
Alternative lending has made personal loans so accessible and instantaneous that they are no longer simply the last resort in managing a financial catastrophe. A growing number of people are realizing they’re a resource that can be used for anything, from getting a car tune-up to expanding the home along with a growing family.
Disclamer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. Although we promote products and services form our partners, our opinions are our own.
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Goldman Sachs-backed Even Financial, a digital matchmaker between banks and customers, just bought an insurance startup as life insurers are seeing policy applications boom
Even Financial has acquired LeapLife, a leading insurtech platform. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Business Insider wrote an article about it, interviewing our CEO and Founder Phill Rosen.
Even Financial Launches Insurance Offerings With Strategic Acquisition of LeapLife, a Leading Insurtech Platform
Pioneering B2B Fintech Expands its Industry-Leading Financial Services Monetization Platform to Help Insurance Carriers Find and Connect with Consumers New York, New York – April 22, 2020 – Even Financial (Even), the leading API for financial services search, acquisition, and monetization, announced today that it will be launching services for the insurance industry through the acquisition of LeapLife, an insurtech platform and digital life insurance agency. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Even and LeapLife now offer the only full end-to-end, multi-carrier digital life insurance marketplace experience. Over the coming weeks, Even will further integrate LeapLife’s technology and insurance offering into its industry-leading API, making turnkey insurance marketplaces programmatically available to a vast network of channel partners — when and where their consumers are most in need — while also enabling the company to expand to other insurance sectors, including homeowners, renters and auto insurance. This adds to Even’s peerless breadth of real-time, personalized financial product offers — an expansive suite that already includes loans, savings, credit cards, and more. “Even’s goal to evolve how financial institutions find and connect with consumers is not limited to loans or credit cards, but applicable to all financial products and services, including insurance,” said Phill Rosen, Even Founder and CEO. “Despite its importance, purchasing life insurance is often an overwhelming and inconvenient experience. With more than $600 billion in premiums paid each year, and only 6% of policies sold completely online, we see tremendous opportunities to help modernize the life insurance industry and offer solutions that solve challenges for consumers and carriers alike.” LeapLife is an established insurtech platform and digital life insurance agency that utilizes data science, deep underwriting knowledge, and proprietary technology, enabling consumers to apply for instant-decision life insurance policies with real-time quotes. LeapLife works with many best-in-class insurance carriers to offer consumers a seamless experience from beginning to end. This approach made Even and Leaplife a perfect match. As a digital insurance broker, LeapLife offers personalized life insurance recommendations based on a consumer’s unique needs. Paired with the Even API, which enables customer acquisition for insurance to be native and programmatic, consumers benefit from a more streamlined, transparent, and highly personalized experience when shopping for life insurance. Just as Even’s 2018 acquisition of Birch (the award-winning credit card rewards app) allowed the company to accelerate its expansion into credit cards, the addition of LeapLife will similarly put Even at the forefront of consumer insurance offerings. Charles Svirk of MassMutual Ventures, an investor in Even, said “The Even and LeapLife teams share a vision that the future of insurance acquisition will rely on the power of data-driven, programmatic distribution. We are thrilled to support them as their industry experience, impressive technology, and trusted relationships will help scale Even’s insurance offering and build partnerships to provide these critical innovations in insurance acquisition.” The Even API and platform solve significant, long-standing pain points in financial services acquisition by seamlessly connecting supply and demand. Even has continued its rapid growth trajectory in 2020, surpassing over $1.5 billion in credit issued through its API and expanding its platform to over 400 partners. Even has secured over $55 million in funding from major financial institutions, venture capital firms, and fintechs to back its goal to evolve the financial services acquisition ecosystem. About Even Financial Founded in 2015, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. By seamlessly bridging financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as TransUnion and The Penny Hoarder) via its industry-leading API, Even turns any consumer touchpoint into an ROI-driven, fully customizable, programmatic acquisition source for financial product offers with full compliance, security, and scale across loans, savings, credit cards, insurance, and more. Even is backed by leading financial services firms and VCs including American Express Ventures, Canaan Partners, Citi Ventures, F-Prime Capital (Fidelity), Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Even is the leading search, comparison, and recommendation engine for financial services. Media Contact: email@example.com
Even CEO/Founder Phill Rosen quoted in Protocol Braintrust Newsletter
Our CEO and Founder Phillip Rosen was included in the most recent Protocol Braintrust newsletter along with answers from some thought leaders from Plaid, Slack, and DuckDuckGo!