Jeff Fortin has an idea that may turn peer to peer lending on its head. He is focusing on a...
Lending Club has announced an auto refinancing product targeting consumers; Lend Academy provides more details in their article with insight from Todd Denbo, Vice President of Consumer Auto Lending at Lending Club; Lending Club seeks to help make the auto refinancing process easier for borrowers; finds a $40 billion market for auto refinancing which it thinks will expand with greater convenience for consumers in obtaining auto refinancing. Source
Data from the New York Federal Reserve shows delinquent auto loans of approximately $23.27 billion as of December 31; auto loan delinquencies are now the highest they have been since the third quarter of 2008; the increase in auto loan delinquencies appears to be the result of expanded credit from auto financing companies to subprime borrowers; subprime borrowers accounted for approximately $280 billion in fourth quarter auto loans of which 75% were originated from auto finance companies. Source
Lend Academy provides details on the emergence of online auto lending and the market opportunity for both lenders and technology providers in their article; Lending Club is the largest marketplace lender to begin offering auto loans; Finova Financial has launched a new title loan product; AutoFi and AutoGravity are two companies offering innovative online services for the car buying process; in the used car market, Blinker has also been successful in developing a marketplace for car buyers and sellers; LendIt USA 2017 will be featuring a panel on the future of buying and selling vehicles including insight from many of these companies. Source
In November 2016 the New York Fed reported on an increase in subprime auto loan delinquencies putting the sector on watch; a report from Fitch Ratings is now showing continued deterioration in the sector during the second half of 2016 and Mizuho is reporting subprime auto loan loss rates increased to 9.1% in January 2017 from 7.9% in January 2016; Fitch reports that 60+ day subprime auto delinquencies increased to nearly 6% in the fourth quarter of 2016. Source
Auto loans is the largest market that still remains largely untapped by the marketplace lending industry. There are just a...
The below chart was taken from a Business Insider article discussing subprime auto lending. Since 2010, auto originations have been increasing steadily, topping $465.6 billion in 2016. This increase has been in part due to the low interest rate environment. Many people have speculated that the increase in subprime auto loans should be cause for concern. The subprime share of auto loans currently sits at around 17% as shown below. Data from Equifax and VantageScore from 2015 to 2016 shows auto loan delinquencies have increased from historical lows. In 2015, severe delinquencies (60 days+ past due) were 1.24% compared to 1.35% today. As of December 2016, 13.1% of the portfolios at banks and credit unions were considered subprime, defined as having a credit score less than 620, compared to 34.8% of other finance companies. Source
Online consumer, student, mortgage, small business and real estate lending are all verticals that have been tackled by fintech firms...
Creditas, a provider of online secured loans in Brazil, has raised $16 million from the asset-backed securitization market and will use the proceeds to fund auto loan refinancings; the firm partnered with Empirica Investimentos Gestao de Recursos Ltda to launch the securitized investment portfolio, FIDC Empirica Creditas Auto; Creditas seeks to capitalize on an auto loan refinancing market opportunity that has seen increased risk from higher defaults with decreased lending from traditional banks; Brazil reports secured personal credit accounts for 1% of the country's outstanding loans; Creditas plans to offer auto refinancing at monthly rates of 1.99% to 3.65% for an annual rate of approximately 37% which compares to bank rates annually of 120%. Source
Seeking to be more involved in auto financing, the firm has launched Clearlane; the platform has been developed from the firm's acquisition of BlueYield; the integration and enhancement of the acquired business has resulted in a simplified customer experience and broad range of offerings; the platform includes over a dozen finance providers offering consumers auto financing and auto loan refinancing options with various opportunities identified for expansion. Source