Credible, the multi-lender marketplace for student loans, has today announced the close of a $10 million Series A funding round led by Soul Htite, founder and CEO of Dianrong.com and co-founder of LendingClub, with participation from Prosper president Ron Suber and Scott Langmack.
Unlike other student loan marketplaces that sell leads to lenders, Credible works by getting firm offers of credit for their customers to evaluate and choose from.
When a student gets accepted to a university, they (and their parents) can fill in all the required information on Credible, which then sends the relevant information to their lending partners. Working with 12 different lenders, Credible gets a fixed quote on loans for that individual student and lets them choose the credit line that works best for them.
The line of credit is legally viable and set for 30 days — meaning Credible isn’t offering a range of rates, but an actual loan — and once accepted, the transaction is complete.
Credible also offers a student loan refinancing product, letting graduates who want to adjust their numbers refinance their outstanding federal and private student loans.
Credible founder and CEO Stephen Dash said that, of the $200 billion in outstanding student loans that have the potential to be refinanced, only around $5 billion of that is actually being refinanced.
The company makes money by taking a transaction fee from the lender once a credit line is actually accepted by the borrower.
“We’re fully aligned with both the lender and the borrower,” said Dash. “We offer the lender an efficient customer acquisition channel, but we never sell user information or leads, ensuring that our incentives are aligned with the borrower, as well.”