Two months in, Lenny – millennial-focused mobile lending app – is ready to hit the market with new budgeting and billpay products.
Launched mid-March, Lenny’s goal is to help millennials build credit scores while still in school, with loans up to $10,000 and 0% interest (if paid on time). So far, the app has more than 7,500 downloads, and 2065 active credit lines. With the “tremendous” amount of engagement in a relatively short period, the company is prepared to launch two new apps, Lenny Blue and Lenny Platinum, CEO Joe Bayen told Bank Innovation:
Think of Lenny Blue as a budgeting app, like Lenny plus Mint. We will also allow for multiple credit lines. This will encourage users to stay on budget, and give them a realtime visibility on their spending habits.
The new app will also feature Lenny’s Venmo-like, same-day P2P payments solution. Bayen expects the app to go live this summer. Later in the year, the company plans to launch its third app, Lenny Platinum, that will also include a same-day billpay solution.
This move follows in the path of other lenders that began with students such as SoFi and Earnest.
Just last week, Lenny partnered with Fico to give millennials access to their credit scores through the app. “When we initially underwrite our users, we use alternative data, like the school they go to, their grades or even social media feeds, all those can be good indicators of how likely they are to pay a loan,” Bayen said. “So, by the time they graduate, they have already built three or four years worth of credit history.”
You read that right — students’ grades are used in underwriting. Study hard, kids!
The long-term vision is to create loyalty among the millennial user base, Bayen said.
If we offer our audience all this products, on a channel they know, in the long term, when they need a car loan or a mortgage, we have already built that trust. For the next generation of borrowers, we will be able to offer them a competitive rate, because we have been tracking how well they fare for a long time.
Lenny plans to eventually offer full-spectrum financial products to its users, and is seeking to partner with banks or other FIs. Currently, the app charges a $2 monthly fee for its interest-free loans. When a borrower misses the payment, the loan switches to a 7.9% to 14.9% interest, depending on the customer’s credit score.1 - Reader Likes This Post