The platform, announced Wednesday (June 25), offers same-day funding and soft credit checks for borrowers the company says have been historically overlooked by traditional lenders.
“The new system aims to simplify access to small-dollar financing by matching applicants with licensed lenders through a fully secure online process,” Radcred said in a news release. “This platform responds to growing consumer needs for fast, flexible, and transparent lending especially in emergencies involving $400–$500.”
The release points to Federal Reserve data showing that more than 60% of Americans would be unable to afford an emergency costing that amount without needing to borrow money, use credit or sell assets.
“This gap in short-term financial security has driven millions to seek alternative financing, with online payday loans becoming a key solution,” Radcred said.
As research by PYMNTS Intelligence has shown, subprime borrowers are increasingly relying on nontraditional avenues such as payday loans, credit-builder loans and buy now, pay later (BNPL) services to manage essential purchases and cover cash flow gaps.
“They apply for loans and BNPL at higher rates than other consumers; for instance, 40% of subprime borrowers have applied for BNPL compared to 27% of super-prime consumers, and they are 2.1 times more likely to have applied for a payday or credit-builder loan than those with higher credit scores,” PYMNTS wrote last month.
Meanwhile, additional research by PYMNTS Intelligence shows that a significant portion of consumers routinely face major unplanned expenses, something that has reshaped how financial institutions need to approach credit offerings and consumer flexibility.
The PYMNTS report, “Managing Unplanned Expenses: How the Pay Later Economy Fits Consumer Needs,” spotlights the pervasive nature of unexpected spending among U.S. consumers, showing that 35% of Americans had made an emergency purchase of at least $250 in the last year.
“These unplanned expenses, which by definition fall outside planned budgets, typically involve significant amounts, with a median cost of $605 for emergency purchases and $497 for impulse buys,” PYMNTS wrote earlier this week. “Common categories for these expenditures include auto parts, home maintenance and repair items, and appliances, with median costs ranging from about $500 to over $2,000.”
The research also found that around half of all unplanned retail purchases were made using credit. Credit cards are the most common choice, used by 35% of consumers for impulse buys and 33% for emergency purchases, with BNPL used in about 10% of those transactions.
