Come on.

george grombacher 0:12
Life love this George G. And the time is right welcome. Today’s guest is strong and powerful Bobby Ritter back Bobby, are you ready to do this?

Bobby 0:20
I was born ready, George, I love it. let’s let’s let’s go. Bobbi is the president of personal loans at marlette funding, they are the provider of best egg personal loans. They’re a FinTech company on a mission to find better ways to make money accessible, to allow people to enjoy life. excited to have you on. Bobby, tell us a little bit about your personal life some more about your work and why you do what you do. Thanks, George, really excited to be here. So I live in Newark, Delaware, with my wife, two sons and daughter. On a personal note, I love to travel. I’m a movie enthusiast, and a pretty big Dallas Cowboys fan. As you referenced earlier, I’m the president of the personal loan business at marlette funding, where we serve customers under our consumer brand of best egg. To answer your reason why I do what I what I do, is honestly, I just love being part of this FinTech movement, where, you know, we’re reinventing products and digitizing experiences to better meet the needs of today’s consumer.

george grombacher 1:29
Nice. So give me please the landscape of personal loans. I don’t know what the best way to segment it is, has it been steady? Has it been changing? what’s what’s what’s going on right now?

Bobby 1:46
Yeah, so it’s definitely been changing over the years. So just if I take you back a little bit, we have the last financial crisis, kind of back in the 2008 era, personal loans, despite being a product that’s been around, you know, for as long as, as long as money is probably it’s, uh, it goes to a spot where, you know, there’s very few personal loans being done, some people are still going to the local credit unions or banks, but the product is, is almost disappeared. And around that time, a couple of fintechs started to reinvent it a little bit, moved it from being a really, you know, full of friction process, that took a long time to get alone to one where it became a lot easier. And they, you know, they helped connect people who wanted to lend money with people who want to borrow money, and the space has grown significantly, at this point, the, you know, top kind of half dozen fintechs probably do more in personal loans than than all the banks combined.

george grombacher 2:59
Why did they almost disappear.

Bobby 3:02
So it became something where, you know, credit cards were growing a lot. And there’s probably a little bit of things around the banks, and how much how much equity they had to hold for this type of loan product, that kind of in that in that crisis, where regulators had bank start to hold more and more equity against things. So after the kind of too big to fail, stuff went down, they had to hold more equity, and therefore the product became less appealing to them. That’s why one of the beauties of the fintechs that entered the space at the time was they were more of a marketplace connecting buyers and sellers. And they didn’t they didn’t have to hold as much equity.

george grombacher 3:47
Got it. Okay, interesting. And share with me the differences between what these six FinTech providers that you talked about. So what you and marlette are doing and best egg are doing versus when I’m driving down the street, and I see title loans and payday lenders and stuff like that.

Bobby 4:11
Yeah, no, that’s great. So you know, number one, there’s, there’s definitely more than six I’ll just kind of picking the shirt the leader is because they really start to scale their businesses. relative to your question, you know, there’s really a pretty significant difference between us and them. So, for starters, when we think about our competition, that isn’t really the type of folks we compete with. We are we are trying to make sure we help serve this an underserved population in terms of where the banks will serve, your banks are going to gravitate really to like a super prime segment. So becomes very hard to be able to get to get a loan. But we’re definitely in a space where what we’re trying to do largely, at least with a personal loan product, is save people money on what they are, what they’re revolving on their credit cards today. And, you know, in order to do that, you have to be very competitive with price. So I want to say, on our platform, we’re probably saving people, two to 300 basis points to 3%. versus what they what they typically pay on credit cards.

george grombacher 5:37
So it’s probably not possible or maybe it is knowable for why it is that that. And I think that since 2014, I read that y’all have done 11 billion in in prime loans. Do you know how that segmented is a lot of it paying off credit card debt?

Bobby 5:57
Oh, yeah, so so we’ve, since then, we’ve actually exceeded 13 billion, we’ve had a really a really strong year this year. And you’re right, the number one reason customers will give four, four, the reason they take a personal loan is around debt consolidation, or credit. Art reasons people would list probably never to be home improvement. But what I would say for the most part is, really, consumers typically want one of these loans for one of two things. So one is kind of life happens, right? So you know, they have they need a car repair or their HVC goes, or they’re sending somebody off to college, or just some need that triggers it. And often, when they when they need this, instead of the $2,000 that they need for this specific need. They might say, Hey, why don’t I just take a look at where I’m at, I owe, you know, $11,000, on my credit cards, I need this 2000 maybe I just get alone for 13. Instead of being on the, the, you know, hamster wheel, the credit card where it seems to never go down. Even though I’m making payments every month, I get it on, again, on a payment program that says hey, I know I’ll be have this paid off in three years or five years or whatever works for them. And by the way, I’m also getting this, this thing I want to do done so sure, credit, credit card consolidation is a big part of it. But there’s usually something that that, that that triggers it for folks. That said, there are definitely the segment of people who, you know, just happen to see one of our ads, whether it’s in the mail, or you know, at a at a partner site, like Credit Karma and say, Hey, this seems like a good idea. I’m, you know, my finances are something that I’m concerned about. And, you know, I just want to start to take control and, and put myself on a path to be debt free. So that’s definitely a an angle as well.

george grombacher 8:03
Yeah, that certainly does make sense. While I’m in the mode of thinking about this, why don’t I address these other issues that have been weighing on me, you know, on this hamster wheel getting crushed by credit card debt, this is maybe an opportunity for me to to to get out of that and actually come up with a plan. So you mentioned that people can save 200 to 300 basis points. So two to 3%. Potentially, and obviously that that that that kind of depends. What what are the factors that that that go into the cost, the pricing of your personal loans?

Bobby 8:39
Yeah, there’s, there’s a couple big pieces, but I think the primary drivers are obviously how you’ve measured credit that certainly matters. So you know, not to be as generic as credit scores, it’s a little bit more, more complicated than that. But your credit scores a great indicator of where you’re at. And then as you might expect your ability to pay back the loan matters as well. So a lot of people refer to that as debt to income ratio, which is basically, you know, how much disposable income Do you have to be able to put toward toward this? I think they’re two of the biggest two of the biggest factors. Now, what I will say is, there’s definitely we try to be a little bit broader than just reducing people to, to a score and or to, you know, even even what that that dti or other attributes that typical lenders use. One of the things that we’ve recently introduced as as a credit health platform, or a financial health platform that helps people understand where they’re at, and it also provides kind of direction and coaching around what, what to do to get your score in a better place or even just depending on what your your goals are. You know what Can what can be done to help help achieve that when we’re kind of looking at your score? That’s I was a recent launch we did on it on a limited basis earlier this summer and expect to scale it pretty substantially next year.

george grombacher 10:14
I think that that’s exciting. And I mean, I appreciate very much when you say we’d like to try to take it a couple steps further than just credit score to qualify people, because we all have unique circumstances. And I appreciate that that’s really hard when you’re dealing with 1000s of people, right? Is, is the technology really helping with that?

Bobby 10:40
Yeah, absolutely. So there’s, there’s all kinds of alternative data that’s available to help us make these decisions. But in the background, there’s, there’s certainly a human element, but also, ai sits behind what a lot of the decisions that we’re making. And it takes in all of these these data points, whether it’s how you’re interacting with us, what you’re, you know, what your history is, like, in some cases, even people will volunteer to help connect us to their to their bank history, because that is the kind of thing that helps them get higher lines and lower rates and, and products that fit what they what they really need.

george grombacher 11:26
Yeah, imagine that the more the consumer can do on their and to position themselves for success, the better result that they’re going to have? And I don’t know if it’s, like a secret, or do you have a sense? And can you share it totally fine. If you can’t, how many people get turned down for it, percentages, stuff like that?

Bobby 11:49
Yeah, I mean, in terms of in terms of likelihood of success, probably just under half of the people that that apply, for the personal loan, are able to get it at their initial at their initial application. But the beauty of what we have currently is you can do it in a risk free way. Because the way the market is evolved, there’s products out there that you can do it without impacting your credit. So you can kind of come in, check in essentially a notch, you got the best tech comm, you can, you know, enter your information, essentially, anonymously, because you’re online, you don’t have to face another human being that’s sitting in front of you that you might be worried about judgment or whatever else. And, you know, you can find out where you stand, what does what loan amount will they give me? What rate would they give me, and then determine if it if it’s a fit for your needs. And so even though there’s kind of that, that risk of, you know, wish we could qualify everybody, we’re in a, we’re in a spot where, you know, somebody can do it without without really feeling like they’ve given up much to kind of see where they stand.

george grombacher 13:09
Got it. Nice, I appreciate that. And so the loan amount and the amount, or rather the rate, that’s going to dictate a big part of what the actual cost will be. But then the actual term itself, is there flexibility on on that? How does that work?

Bobby 13:28
Yep. Typically, most people choose either a three year loan or a five year loan. But we have we have loans that range anywhere from from two to seven years, depending on the person’s situation and preference.

george grombacher 13:45
And is there what is the minimum? What is the maximum loan amount?

Bobby 13:50
Yeah, so $2,000, the minimum loan amount for our platform, and right now we lend up to $50,000. Probably averages a little on the lower side, but averages typically around $15,000. And one of the reasons for that is that’s pretty close to that the amount of debt our average, our average customer carries coming into the coming into the transaction credit card that that is

george grombacher 14:19
nice. Okay. So, and the average time you said three to five years.

Bobby 14:26
Yeah, 3333 and five, our most popular choices. Got it. And the beauty of what we’ve, what we’ve built is, once you kind of check your rate, you’re the other thing is the level of work and time that comes after that is pretty low. More than 60% of people are are funded within one business day. So you know, in a lot of cases, probably, you know, almost half of the people don’t have anything more to do than just accept the terms. Occasionally, there’ll be some steps after that, where, you know, we have to verify they are who they say they are, if there’s something that looks in question or some income verification, but we have a lot of automation there, and that’s what keeps the process pretty easy and quick.

george grombacher 15:21
Got it. So I certainly see value when you can help people to, obviously overcome in an emergency situation, but then also consolidate credit cards and save a substantial amount of money. You mentioned 200 to 300 basis points, whatever it is, it’s lower than they’re currently paying. So there’s, there’s there’s value there. And I also appreciate that y’all are a business. So you’ve, you know, we’re interested in making money. And I also assume that you want people to pay, pay back the loan on time, you don’t want people to be defaulting, because that probably ends up costing you more money.

Bobby 16:01
Well look at overall from a cut. Yes, this is of course, yes. Why just again, step back for a second, the company. Again, we’ve talked about it being a FinTech company, our mission is to inspire confidence by offering simple, personalized, accessible solutions to overcome challenges with everyday finances. So we talked a little bit about a personal loan product. Even though in a lot of cases, on the personal loan side, people are consolidating credit card, we also have a credit card product for people that that’s the right fit for them and where they are, and this and this platform that we put out there. So to answer your question, on defaults, certainly, we don’t want that for our reasons. But it’s also not great for the for the consumer. So when when COVID hit last year, there was this huge time of uncertainty, right. And honestly, even though the average credit and and of our customer is pretty is pretty strong. Because of that uncertainty. People didn’t know what was coming next for those few months, almost a quarter of people ended up reaching out for help. And we were able to, you know, work with them to kind of navigate that timeframe. So, you know, maybe it was a payment holiday, maybe it was a different plan to kind of spread out things over time. But for the most part, that really did actually help us get through that. As you know, with the overall economy, things have certainly rebounded from the uncertainty that came during that time. But having helped so many people through that, you know, the loyalty that was kind of driven through that, right now we have the lowest default rates we’ve ever had. And, you know, and that’s after a point in time, and like I said, we had to go as deep as a quarter of all customers saying, hey, I need some help. So it was really it was really a, it’s really been a good, a good turnaround.

george grombacher 18:10
That’s great. I appreciate that very much evidence that I assume that you consider to be evidence that your approach is working, that people are pretty proactive that a quarter of them reached out to you versus just put their head in the sand, so

Bobby 18:26
And to be honest, they probably wouldn’t have just done it on their own. The we were pretty proactive with saying hey, by the way, we know times are crazy, you know you can we’re here to help you please reach out to us. If you think it’d be it’d be useful. One of my one of my tips I would give to people forgetting about just best egg just in general if you if you’re borrowing and you start to get into trouble that’s odd people have a feeling of shame. Or you know, they just don’t want to face it and like I just told you we were a quarter of all the customers set raise their hand and said something so you’re not at all alone. And your lenders are they definitely want to help you for all the reasons you said it’s good for you and it’s good for them. So you know I just strongly recommend that like, if people start to feel stress, just assume your lenders are there to help and and and reach out.

george grombacher 19:26
I love it. That’s a solid difference making tip right there, Bobby. Beautiful. Well thank you so much for coming on. Where can people learn more about you? How can they engage with best egg

Bobby 19:39
so definitely at best egg calm or they can follow us on Twitter at my best egg.

george grombacher 19:46
Excellent. Well if you enjoyed this as much as I did show Bobby appreciation and share today’s show with a friend who also appreciates good ideas go to a best egg calm and find out what your situation could look like. With are impacting your credit, and then find him on Twitter as well. Thanks, Bobby.

Bobby 20:05
Thanks, George. Appreciate it.

george grombacher 20:06
And until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai