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LoanNow launches as an innovative online lender that rewards borrowers for good behavior
LOS ANGELES, June 17, 2014 /PRNewswire/ -- Silicon Valley-style innovation comes to Southern California with the launch of LoanNow. A team of technologists and consumer finance veterans has united to tackle the $15 Billion payday loan problem.
According to the Consumer Financial Protection Bureau, 12 million Americans live in the payday loan cycle for an average of five months per year. These loans come with predatory APRs of 339% on average, but can exceed 1,000%. Disguised as short term loans, payday loans are in reality long term, high interest debt traps.
The technology driven startup is challenging an industry that inherently keeps borrowers indebted. LoanNow's model is to instead provide longer repayment terms at much lower APRs. Additionally, LoanNow is turning repayment into a rewarding game-like process. Borrowers unlock achievements to help raise their credit score or even reduce their interest rates. "We don't want to just balance high default rates with predatory APRs and aggressive collection practices like most payday lenders," says co-founder and Chief Product Officer Miron Lulic. "Instead, we leverage the power of game mechanics to reduce default rates. We designed our lending experience not to trap borrowers, but to help them succeed."
LoanNow's vision finds its roots in the microfinance model pioneered by Muhammad Yunus. The Nobel Peace Prize-winning recipient founded the Grameen Bank to lend to the world's ultra poor. Grameen lends to borrowers with no credit history yet maintains a default rate of less than 1%. "There's incredible financial and social value in holding risky borrowers more accountable to each other," says co-founder and CEO Harry Langenberg.
Through achievements and education, LoanNow incentivizes borrowers to improve their financial well-being. Lower default rates translate to a lower cost of credit for the borrower and a higher repayment rate for the lender – a win-win dynamic.
LoanNow is a socially-responsible lender that offers a better alternative to payday loans. It turns loan repayment into a success-based process that's both fun and rewarding at the same time. Borrowers succeed by saving money and unlocking opportunities to refinance at lower rates. Investors enjoy lower defaults and a more socially-responsible business model.
To learn more about LoanNow, you can visit https://www.loannow.com/
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