Debt Consolidation: LendStreet Negotiates for their Borrowers

LendStreet is an American debt consolidation platform for consumers who are heavily in debt and for accredited investors looking for opportunities with positive social impact. They just closed an equity round which should help them scale up.

LendStreet was launched in 2013 in California. This platform is first intended to help consumers who are struggling with too much debt, including debt held by debt settlement companies. LendStreet negotiates discounts with creditors on behalf of their customers. They restructure these debts as personal loans with lower interest rates (14 to 18% on average) and a lighter repayment plans. These loans are proposed for institutional investors and some independent accredited investors.

LendStreet also provides training tools to their borrowers, allowing them to better manage their budget and improve their financial health faster.

They just raised $117 million: $7 Million Series A equity round with Prudential Financial and Radicle Impact, alongside former investors, and $110 million in debt financing from Prudential and Community Investment Management.

Comments – A platform for investments with a positive social impact

LendStreet stands out on the US market for debt consolidation as they praise a responsible/social approach where investors contribute to finance loans for people/customers who are heavily in debt. This platform reports less than 10% in default rates however these targets are considered high risk.

LendStreet charges fees on investors and shares revenue with debt consolidation companies. They report that customers have reduced their debt by nearly 40% and improved their credit score by an average of 100 points (over 18 months). This is a serious competitive edge before companies where high fees apply over a very long period of time, and with lasting impact on the customer’s credit score, since every purchased loan is considered as a non-payment. This responsible and innovative approach to solving over-indebtedness issues has been attracting investors, via an online platform and companion educational tools.