In the world of student loans, the opportunity and lure of refinancing may be a siren call, both for students and the lenders. And as Re/Code noted Wednesday (Sept. 30), a recent entrant into a crowded field, Credible, has gotten, well, some (Wall) Street cred.
The firm has raised $10 million through a Series A investment round, which comes on the heels of a $2.7 million seed round earlier in 2015. The latest financing was led by a consortium of investors, chief among them Lending Club co-founder Soul Htite.
Re/Code notes the rather streamlined methodology tied to the site: The user enters details such as who they are, where they went to school, how much they make under current employment, and thus is the refinancing process born. The company also matches new borrowers to lenders, but as Re/Code said, the lucre is in refinancing. The mission is to match up what would be termed “premium” buyers with the steady career path and paychecks with lenders who will offer relatively better rates. The company itself does not dole out the cash — rather it serves as a conduit between borrower and lender.
In an interview with the site, Credible Founder and CEO Stephen Dash gave a brief overview of student lending and where it was and where it is headed. “In student lending, the market has changed a lot,” he told Re/Code. “There was one lender when we started refinancing, just SoFi, and now there are more than 12. There was literally one option to refinance a federal student loan.”
The $10 million raised will be earmarked for technology initiatives and finding new borrowers, the CEO said, and also expanding partnerships akin to the one with the American Medical Association, which can serve as a springboard of candidates qualifying for refinancing.
And that of course means most roads lead to the federal government as one of the only real alternatives in a marketplace where debt is commonplace. As much as 71 percent of college students exit the halls of academia with some form of unpaid debt.
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