In response to reports that Canadians are increasingly making scheduled payments on their loans, Borrowell, a Canadian lending marketplace, is lowering interest rates.
The lower rates come just as the company hits $50 million in loan applications.
Borrowell’s lowest interest rate is being reduced to 5.6% APR from the previous low of 5.9% APR.
These adjustments come after Equifax released its National Consumer Credit Trends Report. While the report found consumer debt continues to climb, the national 90 day plus delinquency rate fell 3.7% compared to the same period last year, meaning Canadians are making regular payments to reduce their debt.
“We carefully monitor national debt trends and respond immediately,” Scott Laitinen, Chief Risk Officer at Borrowell says. “With Canadians repaying debt responsibly, delinquency rates in Canada have continued to decline allowing us to confidently lower our interest rates because we know Canadians repay their loans.”
“We think all lenders should be reducing their interest rates,” said Andrew Graham, CEO, Borrowell. “There is a real improvement in Canadians paying back their loans. We’re choosing to pass those savings onto the borrower, and we can still give the same rate of return to our investors.”
Taking a similar approach to Airbnb, Borrowell operates exclusively online, matching investors with borrowers. Goldman Sachs estimates online lending could grow to take over $1.7 trillion of an addressable $4 trillion of debt worldwide.
Last year Borrowell raised $5.4 million in seed funding.