Vouch Offers Better Loan Rates to Customers Whose Friends Sponsor Them
Alyson Wyers — February 19, 2015 — Business
References: vouch & springwise
Instead of offering discounts to people based on how much influence they have on social media, this new venture puts a spin on social currency by offering applicants better loan rates if their friends and family members trust them. Vouch uses a crowdsourcing model by obtaining small financial guarantees from the customer's loved ones.
The lending startup essentially offers better loan rates to those who can find people to vouch for their financial stability. Loan applicants download the Vouch app and can improve their credit core using the trust of their network of sponsors. Family and friends can pledge small sums (starting at $25) towards their loan, which will only be payable if customers default on payments. The more sponsors a customer has, the lower the interest rate.
The lending startup essentially offers better loan rates to those who can find people to vouch for their financial stability. Loan applicants download the Vouch app and can improve their credit core using the trust of their network of sponsors. Family and friends can pledge small sums (starting at $25) towards their loan, which will only be payable if customers default on payments. The more sponsors a customer has, the lower the interest rate.
Trend Themes
1. Crowdsourced Loan Guarantees - Disruptive innovation opportunity: Develop a platform that allows individuals to crowdsource loan guarantees from their network to obtain better loan rates.
2. Social Currency Financing - Disruptive innovation opportunity: Create a system where applicants can improve their credit score by leveraging the trust of their friends and family members as a form of social currency.
3. Trust-based Lending - Disruptive innovation opportunity: Build a lending service that offers preferential loan rates to applicants who can provide financial guarantees from their loved ones.
Industry Implications
1. Fintech - Disruptive innovation opportunity: Combine technology and finance to create a platform that revolutionizes the way loans are obtained and interest rates are determined.
2. Peer-to-peer Lending - Disruptive innovation opportunity: Establish a peer-to-peer lending network that incorporates a crowdsourcing model, allowing individuals to vouch for each other's financial stability.
3. Personal Finance - Disruptive innovation opportunity: Develop innovative solutions in the personal finance sector that leverage social networks to provide borrowers with better loan terms based on their social connections.
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