On the heels of a host of new equity-tapping products coming into the market, San Francisco-based peer-to-peer lending firm Prosper has announced the launch of a digital Home Equity Line of Credit (HELOC) offering to be launched in 2019.
Aiming to simplify a notoriously difficult and prolonged application process that often leads to consumer frustration, Prosper says it is attempting to respond to an increasing trend of consumers looking to access lines of credit based on increasing home values illustrated by a 2017 HELOC study conducted by TransUnion.
That study estimated that as many as 10 million consumers will take out HELOCs between 2018 and 2022, more than double the amount originated between 2012 and 2016.
Prosper intends to work with banks in order to streamline the application process itself, as well as shorten the closing times for borrowers. Banks will also, in turn, have access to Prosper’s customer database, which may allow them to increase the size of their footprint in the HELOC space.
Prosper’s HELOC process aims to get the application timeline down to a few minutes, and receive a nearly-instantaneous prequalification offer. HELOCs originated through Prosper will also lack an origination fee commonly found at other financial institutions, and claims to offer rates that are competitive with banks.
In a press release, Prosper Marketplace CEO David Kimball remarked on the aim of the new offering.
“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,” he said.
Written by Chris Clow