Many working families have for too long found themselves in an all too familiar situation: too many bills, not enough money. Even the most responsible individuals can sometimes find themselves in a short-term crunch. In the past, one’s options were limited and severe. A payday loan came with a stringent application process, outrageous interest rates, and hidden fees. On top of that, credit agencies normally ignore payday loans, so even if you paid your loan back on time, your credit score didn’t improve.
Enter LendUp. LendUp is a new kind of direct lender that focuses on responsible lending practices. LendUp uses meta data analysis to identify certain individuals as eligible for loans even if they would otherwise be denied by a bank. The process differs from traditional payday lenders in several important ways.
First, the application process is streamlined. Usually, loan applicants are all required to submit the same supporting documentation when applying for a loan. LendUp uses non-traditional data analysis to customize the questions that as asked of applicants and the documentation that is necessary. This results in a process that is both quicker and more accurate.
Next, LendUp incorporates financial education into its loan process. As you complete different modules, you move up the LendUp ladder to a higher level. With each higher level comes more advanced education and access to a wider variety of loan options. The end goal is to create financially savvy households.
Finally, LendUp allows continually responsible borrowers to eventually report their successful repayments of loans to the major credit agencies. This lets consumers build their credit, and it makes it easier for them to get larger, traditional loans for purchases such as a car or a house.
LendUp was founded by Jacob Rosenberg and Sasha Orloff, the latter of whom has over a dozen years of experience at the World Bank. Together, they have created a company that is more transparent and supportive than its competitors. LendUp has already begun to evolve with the recent launch of its own mobile app. The future will no doubt contain more innovations designed to ease the previously difficult process of securing a short-term loan.