Splash Financial, a Cleveland-based startup that has partnered with the Pentagon Federal Credit Union to refinance student loans, has raised $4.3 million in a round of venture financing.
The round was led by CUNA Mutual Group, a PenFed partner, and Northwestern Mutual Future Ventures, the corporate investment arm of Northwestern Mutual.
As student loan debt skyrockets, more financial services companies are looking for ways to cash in on the growing national problem.
Splash Financial provides an easy, online way for PenFed to originate loans that folks can use to consolidate their student loan payments.
Terms Splash Financial offers aren’t terrible, according to NerdWallet. Through Splash Financial, borrowers can get loans with fixed interest rates ranging between 3.87% and 7.03% and variable interest rate loans ranging between 3.05% and 7.79%.
“Through this funding round, Splash has gained not only new investors but also strong partners in CUNA Mutual Group and Northwestern Mutual,” said Steven Muszynski, founder and chief executive of Splash Financial, in a statement.
The company said it would use the money to bring on additional banks and credit unions as lending partners and expand its national footprint.
It’s worth noting that while CUNA is a PenFed partner, Northwestern Mutual does not appear to be. As insurers look for ways to market other home, life and health insurance products to younger generations that are not buying, student loans are a opportunity, these companies said.
“We believe in the power of financial innovation to change lives, shape futures and build a better tomorrow,” said Brian Kaas, president and managing director, CMFG Ventures. “Student loan refinancing is an important area of opportunity for financial institutions, so we’re glad to invest in this innovative loan refinancing platform. It’ll help millions of college students tackle student loan debt and connect them with financial institutions for long-term success.”