SoFi offers auto loan refinancing via the MotoRefi partnership
- Online lender SoFi plans to offer customers the option of refinancing auto loans through a partnership with MotoRefi, according to Bloomberg.
- SoFi executive vice president Jennifer Nuckles said the company responds to frequent customer requests to offer auto loans. “We also looked at our internal data and found that a large chunk of our members had significant car loan balances and … could benefit from refinancing,” she told the transfer service on Monday.
- Through an Application Programming Interface (API), SoFi customers can connect to MotoRefi’s auto-refinancing technology. As part of the partnership, MotoRefi will pay SoFi sponsorship fees, according to Forbes.
“I think of the potential billions of dollars in auto loans. That’s a lot of auto loans that really should be refinanced,” MotoRefi CEO Kevin Bennett told Forbes. “We want to make auto refinancing as common as mortgage refi.”
Bennett told Bloomberg he hopes SoFi’s scale and nearly 2 million customers will build brand awareness and expand the auto refinance market.
Only about $ 50 billion in auto debt in the United States is reworked in any given year, Bloomberg reported.
“This is not a time that consumers think about, and we are changing that,” Bennett said. “We think it’s perfectly reasonable to assume that everyone who refinances their home will refinance their car.”
MotoRefi also announced that it has entered into similar partnerships with Even Financial and Savvy, according to Forbes.
For SoFi, the partnership with the Arlington, Va.-Based startup represents the company’s latest product expansion as it continues to strive to become more than a student instant loan fintech.
The company announced last month that it was pursuing a faster route to a banking charter when it revealed its intention to buy Golden Pacific Bancorp – a three-branch community bank based in Sacramento, Calif., with $ 150 million in assets, for $ 22.3 million.
Switching from SoFi to a bank change control application typically has a faster turnaround time than going de novo, a process that required Varo Bank three years.
SoFi has announced plans to commit $ 750 million to SoFi Bank’s national digital banking strategy if regulators give their approval. Golden Pacific and its branches would operate as a community banking division.
The planned acquisition comes as SoFi aims to make public through a merger with a blank check company backed by venture capitalist Chamath Palihapitiya. The $ 8.65 billion deal, which is expected to close in the coming weeks, will provide the online lender with up to $ 2.4 billion in cash.
SoFi also plans to increase its customer base to 3 million this year, from the 1.7 million it reported in December, according to The Wall Street Journal. The company expects its adjusted net income from loans to increase 38% this year and expects the adjusted net income of its consumer banking division to quadruple.