To drive savings and simplicity while improving financial health, LendingClub has extended balance transfer to more borrowers. The offering lets borrowers seamlessly pay credit cards as well as high-interest debt as part of the personal loan process, the company said in an announcement.
Borrowers enter their account information and the amount they’d like to pay down when they apply for a balance transfer loan. The company then makes sure that creditors receive direct payment and that money remaining from a customer’s loan is deposited into their bank accounts. It also noted that many members who opt for a balance transfer loan save money, reduce their credit card interest rate and increase their credit scores.
LendingClub President Steve Allocca said in the announcement, “By directly paying down credit cards, we’re supporting our borrowers on their path to taking control of their finances.” Allocca continued, “This feature is directly in line with our mission of helping members improve their financial health and is an excellent example of how we’re innovating to make the experience simple and seamless.”
The company said it piloted balance transfer with a subset of debt consolidation and credit card refinance borrowers for over a year prior to making it more widely available to qualifying customers. It works with over 1,700 credit card, bank and loan companies through a partner network. And, through balance transfer, members can add up to 12 creditors per loan. They are also “able to begin improving their financial health immediately—from the time of their application,” according to the company.
LendingClub also plans to roll out a credit card tracker within its Member Center later this year to further help members with their financial health. While it functions as a stand-alone credit card tracker today, the company said it will become a customizable plan in the future. It will help members prioritize and pay down credit card debt, build credit eligibility, and grow savings on their path to financial wellness. As it stands, the company says it has facilitated over $47 billion in loans to more than 3 million members since its launch in 2007.