While LendingClub, Prosper, Avant and SoFi are giving existing borrowers breaks in the short term, they're considering tightening credit as the coronavirus outbreak threatens to drag the economy into a recession.
Easy credit has given way to cautiousness, with financial technology upstarts now seeking households with higher incomes, above-average credit scores and less debt relative to their wages.
As the consumer lender announced its seventh consecutive profitable quarter, its CEO bragged that his company is better positioned than the likes of Goldman Sachs and LendingClub.
The online lender will roll out its first new product in 12 years, a home equity line of credit. But it's taking a different approach than with its original offering.
The San Francisco-based online lender reported a net loss of $115 million for 2017, more than half of which was connected to warrants issued in a deal that stabilized the struggling firm.
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.
