The company will partner with banks to improve the application process
Prosper, a peer-to-peer lending platform, has announced plans to launch a new digital home equity line of credit (HELOC) product in 2019.
Starting early next year, the company will be partnering with banks in an effort to improve the HELOC application process and reduce the time from application to closing.
The plan would also allow banks the opportunity to grow their HELOC footprint by gaining access to Prosper’s national customer base, proprietary technology, and marketing expertise.
Under Prosper’s plan, customers would be able to use a simple process to complete an online application within minutes and receive an instant HELOC prequalification offer. The company said this would help borrowers save weeks versus the traditional process. Also, HELOCs originated through Prosper will have no origination fee and offer the same competitive rates as banks.
“We are taking advantage of our expertise in consumer credit and personal loans to build a product that removes the complexity and time-consuming barriers in applying for a HELOC,” Prosper CEO David Kimball said. “For many of our customers, a HELOC could be a better choice for their financial needs, and we’re thrilled to be working with our bank partners to render the traditional process obsolete with a new digital HELOC process that is simple, fast, and painless.”
Prosper’s plan responds to a HELOC process that has historically been difficult and lengthy, leaving many consumers frustrated. Citing a TransUnion study, Prosper noted that more and more people will be looking at a HELOC as a potential option for accessing credit as home values rise. The study reported that an estimated 10 million consumers will take out HELOCs between 2018 and 2022.
