Symple Loans is disrupting Canada’s personal loan landscape with rates as low as 6.99 per cent
There’s a new lender in town offering an alternative to the big banks and fintech incumbents in Canada. And it’s poised to disrupt how Canadians with the strongest credit scores borrow.
Symple Loans — which launched last year in Canada after getting its start in Australia a few years ago — is making lending as its name suggests: simple.
Not only that, the fintech company is going head-to-head with Canada’s largest financial institutions to provide personal loans for a surprisingly often overlooked segment of the market: prime and super-prime borrowers.
“We think there is a big opportunity in the Canadian marketplace serving consumers with strong credit who will pay back their loans,” says David Gold, president and chief executive officer of Symple Loans.
So just what is Symple Loans’ strategy?
In the current economic environment of rising rates and high inflation, “we offer a better solution to the alternatives available to Canadians with faster, easier and low-cost access to personal loans,” he explains.
A digital lender in Canada, Symple Loans offers term loans up to $50,000 via its online, highly secure platform with variable interest rates starting as low as 6.99 per cent, often with same or next day approval.
Just consider the impact for a typical consumer with credit card debt: the savings on a $10,000 debt on a credit card at 22 per cent interest rate would be nearly $4,700 on a five-year term loan at 6.99 per cent from Symple.
Gold notes that rates vary by borrowers based on their credit score, payment history and other financial data, including spending.
Designed for consumers with a credit score starting in the 600s and above, Symple Loans utilizes proprietary, machine-learning powered software that can quickly analyze a borrower’s ability to pay back loans. Based on that assessment, it immediately provides them with their personalized best interest rate. Then, its platform underwrites the loan, often providing approval within 24 hours.
“There are a lot of digital players in the sub-prime and near-prime pay-day lending space in Canada, but we are one of the few pure-play online lenders in the prime and super-prime lending space for debt consolidation, home improvement loans and other needs,” Gold explains.
“These are often consumers with good credit who have balances on their credit cards at much higher rates than they’d pay with us, so they’re often moving balances over to Symple Loans in a very simple transaction — often in a day.”
He further adds large Canadian financial institutions also provide these term loans at competitive interest rates to consumers. Yet this market is not a priority for the big banks to serve.
“We’re talking about a segment of the market covering over 50 per cent of Canadians, and it’s underserved from the perspective of the need for a digitized, simple, fast process at great rates.”
Traditional financial institutions typically make the borrowing process cumbersome for these consumers; they have to come to a branch, fill out forms and wait potentially weeks to get an approval — or not.
“We have digital lending capabilities that most of the big banks just do not have, and so this space is really wide open for a disruptor like Symple,” Gold adds.
“Frankly, this model of offering a highly secure fintech ecosystem of integrated partners to build a modern, online lending platform for consumers didn’t exist 10 or even five years ago.”
Yet today Symple Loans’ model does work thanks to its ability to partner with industry-leading fintech firms, including Flinks, owned by National Bank of Canada. With applicants’ consent, Symple works with Flinks to securely and quickly assess an individual’s banking data, allowing Symple Loans to make faster, more accurate lending decisions.
“With Symple’s proprietary credit and pricing strategies that include the use of supplemental data sources, we’re able to create a more complete picture of a borrower’s financial and employment situation, which allows us to give consumers a larger loan at a lower rate,” Gold explains.
He adds it’s not only that larger financial institutions do not prioritize this kind of lending, given the alternative they provide consumers is credit cards with higher rates and profit margins.
It’s also that, as very large entities, these financial institutions are less able to embrace new technologies quickly that allow them to do what Symple Loans can.
“That leaves the opportunity for companies like Symple Loans to offer a faster, smarter and easier process to get personal loans.”
Already gaining a significant share of the lending market only after operating in Canada for one year, Gold predicts continued growth for Symple Loans.
“We expect that Symple Loans will continue to disrupt the marketplace for good credit consumers, making a noticeable difference in their lives with better rates and an overall enhanced customer experience.”