Underbanked get new online lending choice with ZestCash

A former Google executive is bringing what he learned at the search motor giant to internet financing for the underbanked with ZestCash. ZestCash online personal loan of up to $500 became available in Utah starting Wed. The business said it will use information, Google-style, to minimize risk and maximize benefits for its customers.

A different internet lending approach

Previous Google CIO and VP of engineering Douglas Merrill had been the person who founded ZestCash. ZestCash customers, based on TechCrunch, get to choose how much cash, up to $500, they want to borrow and how long to pay it back it is going to take. The term of a loan is chosen by the consumer with a little help from the ZestCash website. It shows how a weekly payment is affected by time on the site. The financial loans don’t have to be paid all at once meaning smaller installments are made. If a customer gets a loan online, they also are provided with other details. This is a full payment schedule so they can expect their accounts to be withdrawn from by the company. ZestCash also pledges to be flexible with individual borrowers about late payments.

Lending Google-style

ZestCash is entering a huge and growing sector. The Center for Responsible Lending explains that financial loans are usually taken out by lots of people. In fact, 12 million individuals take out loans each year. About $20 billion in loans was given from the payday advance industry this past year. The FDIC shows that 18 percent of households within the United States of America are underbanked. That means 60 million people do not have a relationship with a bank that would allow them to borrow a bank’s funds. Merrill told Reuters that ZestCash will use “Google-style data” to help customers only take out loans they can afford. Millions of individuals who could not ever afford credit will start to be able to determine it with the Google technology being applied to loan underwriting, he states.

Loans are more satisfied with information crushing

The no credit check risk that payday advance corporations are taking are how the fees on the financial loans are determined. The online lending industry might be transformed by the “Google-like information crunching way” that ZestCash will start using, says Quentin Hardy at Forbes. Hardy spoke with Merrill about this. Merrill said that ZestCash utilizes “research in economics, math and computer science” in order for making decisions. Data could be gathered via phone calls, customer questionnaires and information scraped from the web by ZestCash engineers. In true Google fashion, Merrill said “we believe all data is useful credit data.”

Details from

TechCrunch

techcrunch.com/2010/10/12/former-google-cio-douglas-merrill-wants-to-reform-payday-loans-with-zestcash/

Reuters

reuters.com/article/idUS257141103020101013

Forbes

blogs.forbes.com/quentinhardy/2010/10/12/google-style-money-for-americas-poor/