Social Finance, an alternative lender that has made its name in student loans, has branched out into personal finance.
"I wouldn't call it a new direction so much as expanding into the business strategy we had all along," Mike Cagney, a co-founder of SoFi and its chief executive, said in an interview. "The intent has always been to extend into other products." According to some reports, SoFi has been offering unsecured personal loans for several months.
SoFi focuses primarily on prime and super-prime borrowers, with an average borrower FICO score of 780 and income of approximately $150,000, and expanded to offering mortgages in several states, starting with California, last year.
The company is competing with "the Capital Ones and Discovers of the world," Cagney said.
The company has "very quietly been doing this for a couple months," via an obscure link on SoFi's website, said Cagney. SoFi's unsecured consumer loans will provide $10,000-100,000 apiece for fixed interest rates starting at 5.5% and running up to 9.24%.
"For a prime or super-prime borrower, there hasn't been a great product out there," Cagney said, lightly jabbing at SoFi's competitors.