David Nelms said that many digital lenders do not understand how to underwrite personal loans properly, and he took a dig at their lack of profitability. The upstarts say their industry's ability to attract capital speaks for itself.
Residents' low incomes usually disqualify them for standard student loan refinancings, but SoFi and other lenders describe these borrowers as strong credits with high earnings potential who could offset some of the risks lurking in student loan pools.
The credit quality of the collateral is similar to that of the sponsor's prior deals, but there are some structural changes; the senior notes benefit from more overcollateralization, but total OC has declined.
First Republic bank is targeting affluent millenials, providing competition for niche lenders like Social Finance that have courted high-earning professionals with refinanced loans that are the source of a burgeoning securitization asset class.