Sioux Falls, SD – April 4, 2017 – YourLoanAdviser(R), the complete private student lending solutions provider for banks, credit unions and alternative lenders, today announced that its subsidiary, YourLoanAdviser Surety Company*, has introduced two new initiatives: YourLoanAdviser Risk Grades, a proprietary scoring system that builds on traditional credit scoring criteria and adds new dimensions in order to more predictively identify risk and price private student loan insurance, and Basis Points Pricing, a new monthly option for paying insurance premiums over the life of the loan instead of all up front.
“The education financing market has shifted. Seven-years ago, there was very little student loan consolidation and refinance activity and private student loans contributed $5 to $7 billion in new loans each year. Now, private student loan originations have grown to approximately $10 billion per year, more than $100 billion in total loans outstanding of today’s $1.4 trillion market, and lenders are offering great variety in their loan programs,” said Michael VanErdewyk, CEO of YourLoanAdviser. “We believe YourLoanAdviser Risk Grades and Basis Points Payments will help lenders to innovate new education financing products, pass on savings to their members and customers, and better manage their loan portfolios.”
YourLoanAdviser Risk Grades lets lenders take advantage of tiered pricing for private student loan insurance premiums, based on the specific risk level of an individual loan. It’s a proprietary scorecard that brings forward more granular criteria to help lenders more accurately manage the risk. Borrowers will benefit as lenders are able to introduce more diversity in private student loan programs such as fixed and variable rate pricing, undergraduate and graduate degrees, international medical or MBA degrees, and professional education, among others.
Basis Points Pricing is an alternative payment structure that helps lenders better manage their loan portfolios and improve cash flow. It gives lenders the option for monthly payments on an insurance premium, based on the outstanding principal balance, over the life of a loan—instead of paying all of the premium up front.
“Our credit union, bank and alternative lender clients have asked for tiered risk scoring on loans we insure so they can more accurately assess and price a private student loan. We added new dimensions to a scorecard that applies our 30 years and $15 billion in proprietary data, helping our clients to isolate risk to an individual loan in a more sophisticated way,” said VanErdewyk. “And, by shifting some of the payment risk back to YourLoanAdviser, Basis Points Pricing benefits lenders who anticipate a loan may be paid off early.”
VanErdewyk added: “The goal of YourLoanAdviser is to bring more lenders into the private student loan asset class in order to help more students with their education financing needs. Today we work with over 500 financial institutions, and we believe that if more private lenders join the market, education financing will become more affordable and accessible. These two initiatives are helping us deliver on our clients’ needs and meet these goals head on.”
Founded in 2005, YourLoanAdviser has redefined profitable private student lending for over 500 banks, credit unions, alternative lenders and investors. Through its complete Private Student Loan Platform-as- a-Service solution which includes originating, servicing, borrower acquisition, portfolio liquidity and insurance provided by YourLoanAdviser Surety Company, YourLoanAdviser enables lenders to quickly, easily and safely help student borrowers realize their education goals. For more information, YourLoanAdviser.com.
*Not available in California.
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