The CEO of a marketplace lender has said he expects to see a “spike” in the number of loans over January and February, which brokers could help achieve.
Speaking to The Adviser, the CEO of personal loan provider SocietyOne, Mark Jones, said that he expected to see a surge in applications in the immediate future as people suffer from "Christmas remorse”.
Mr Jones elaborated: “We would expect to see a spike in January/February for personal loans, when people get Christmas remorse and people need to make sure that they are back on top of their financials. Probably about half of the loans we get are for debt consolidation, so people will spend up to Christmas and then rather than let the spend revolve on the credit card, we can provide them with a very competitive rate of interest.”
The SocietyOne CEO said that the lender is primarily targeting prime customers, with around a third of the company’s customers being prime already.
He added that these customers can secure an interest rate under 10 per cent, “which is obviously a lot better way to pay down debt over time than to pay on a credit card”.
While half of the lender’s expected loans in the coming months will be for debt consolidation, Mr Jones told The Adviser that the other half is for “money for a particular purpose; whether that be home renovations or buying a car”.
Mr Jones continued: “Our biggest time of the year is actually Q1. So, I think brokers would benefit by checking in with customers in January to see if they need to reset their finances because they've spent a bit too much for Christmas and need a plan to pay it down. If so, then SocietyOne loans are a great product,” he remarked.
Looking forward, the lender CEO said that there will be three main themes to target in the coming year.
“In the marketplace, open data is a really big theme so we will want to work with customers to access their data so we can provide them with a better deal.
“The second thing is that the credit card reforms will impact the credit market quite a bit. People will tend to use credit cards more for transactions than when you need a large amount of money, so we expect to see that behaviour move out to the personal loan space, so that would be good.
“The third thing, from a strategic point of view, SocietyOne is really focused on the broker channel. We’d like to see our broker channel go from 100 loans a month to 200 and then 300 loans a month during the course of 2019.
“So we’d like to see the business triple over the next few months,” he told The Adviser.
Annie Kane is the editor of The Adviser magazine, Australia’s leading magazine for mortgage brokers.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also the host of the Elite Broker podcast and regulator contributor to the Mortgage Business Uncut podcast.
Before joining The Adviser team at Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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