Why should Banks and Lenders consider integrating our Student Loan Repayment program?
- Market differentiator
As one of the first to market with this new, innovative program, you would be a key stakeholder and have strong input on how the program should be structured, among other decisions. Plus, you’ll be taking the lead and offering a program that none of your competitors have.
- Proactively addressing student loan debt crisis with commitment to assist
By sponsoring this program, you acknowledge the student loan debt problem and its effects on the borrower, the lender, and the economy. More importantly, you are stepping up to offer assistance and a solution.
- Potential additional revenue
As interest rates rise, lenders lose out on extra revenue from new, higher interest rate loans because the student loan interest rate is locked. This commission can offset lost revenue from loans locked into low teaser rates or rates that are lower than the current interest rate.
- Goodwill and positive publicity
Help borrowers pay down their loans using other people’s money, doing something they do already – shop online!
Assume the average borrower spends $1,000 per month for online purchases. If the Lender keeps 0.25% of the commission, it would earn $2.50 per month per borrower. If 1,000 borrowers participate in the program, the Lender’s monthly revenue would be $2,500 per month and it grows linearly up to $125,000 per month if 50,000 borrowers participate in the program.
As the program grows, Lenders will have more leverage with merchants to negotiate larger commission splits, which will increase the amount that borrower and lender earns for each transaction. Lenders will also have leverage to partner with more merchants, giving borrowers more options and making it more desirable to shop through the Lender portal.
Potentially, this program can be expanded to other types of lending, from personal loans to car loans to mortgages.