One of the internet’s largest lending platforms, Earnest, recently announced that it has now refinanced over $1 billion in student loan debt, saying that it had crossed a major milestone. Student loan refinancing allows borrowers to consolidate and pay off their student loans; they are left with one refinanced student loan as a result, with hopefully better terms.
Company CEO Louis Beryl stated, “it’s tremendous in that we have reached this milestone far quicker than many companies before us.”
More About Earnest
The online lender uses advanced smart algorithms to help serve millennials who have short credit histories, and it is estimated that to date, it has helped borrowers save up to $300 million over the lifetime of their loans. Earnest, which was launched in May 2014, is very optimistic about their future, and state that they still have about “a trillion more to go” in reference to the money they intend to raise for student loans. The company is also looking to expand into other areas of the finance industry including personal loans, stating that the reason that they began with student loans is because the industry is severely underserved.
Earnest is one of the only companies that is challenging another online lending giant, SoFi, at its own game. However, there are also a host of other companies that are now entering the student loan refinancing market which seems to have been largely ignored by traditional financial institutions. Earnest aims to innovate in order to ensure that everyone has access to quality financial services, regardless of their credit rating or history.
Before Earnest hit this milestone, they successfully managed to complete the securitization of $175 million, bringing it to four times the number of successful securitizations the company has carried out. The bonds that were sold were rated AA (Low) by DBRS, while for the first time, the S&P rated the bonds at ‘A’ marking another milestone for the company.
The company also announced that it had just been granted a new $125 million Credit Facility by Deutsche Bank AG NY Branch. The platform, which launched in January 2015, is meant to be the beginning of what Beryl calls the “bank of the future.” Just after the platform launched in early 2015, Beryl is stated as saying “we can’t just reimagine the financial system, we actually have to reengineer it.”
With the direction that the organization is headed, perhaps it is time to find a new name for it.
Author: Jeff Gitlen
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