LendingTree enters the student loan market
LendingTree sets up a student loan refinancing and consolidation marketplace.
This marketplace will allow borrowers to compare student loan refinance options and search for consolidation loans for federal and private student loan providers, such as peer-to-peer lenders. This announcement comes just 5 months after the company began facilitating new student loans.
Access to this new marketplace has been integrated into LendingTree’s personalization platform, known as My Lending Tree. When a borrower creates an account, the My Lending Tree experience instantly provides them with an overview of their current loan portfolio and alerts them to new investment opportunities by accessing data through the LendingTree network. This allows LendingTree to offer borrowers the ability to leverage their network of traditional, specialty and peer-to-peer lenders.
Tamara Kotronis, SVP & GM, Education at Tree.com, commented:
“Student debt has become a major concern as it relates to the economy, and we hope to help alleviate some of the financial issues with this new product offering. Total outstanding student debt is second only to mortgage debt, but unlike holders of mortgage debt, many holders of student debt do not realize that they might qualify for a better loan.Due to recent market innovations brought by alternative lenders, new offers are available for student borrowers who may have improved their credit profile compared to when they first took on their loans.This experience offers them the opportunity to shop around and compare private refinance and consolidation loans side-by-side on a consistent basis, and to truly find the best solution for their personal financial needs.
There is a staggering $1.2 trillion in student debt in the United States, more than the rest of the world combined. And two-thirds of college graduates in the United States have student debt. This debt burden could well seep in and have crippling effects on the US economy – young adults are delaying creating their own homes, buying cars and rising default rates. According to a recent LendingTree survey, 49.7% of college-educated millennials have student loan debt and 28.7% say they need to pay off their student loans before they can consider buying a home. Additionally, data from LendingTree revealed that, on average, student borrowers have 4 student loans and an average total student debt of $33,000. According to a study by PWC US, 24% of millennials said they expect their student loans to be forgiven eventually.
These circumstances have given rise to an opportunity that a number of peer-to-peer lenders are trying to take advantage of. platforms such as SoFi focus on refinancing student loans, while platforms such as Prodigy instead issue student loans in the first place. LendingTree has positioned itself well to solve, and in theory alleviate, the widespread problem of increasingly onerous student debt.