FinTech firm Borrowell offers low-interest loans and helps customers manage personal debt
Technology is revolutionizing almost every facet of our lives, so it’s no surprise financial technology, or FinTech, is seeing a surge in interest. One of the more promising aspects of the industry lies in digital lending companies, which offer the potential for those who owe to dig their way out of high-interest debt. And Toronto-based Borrowell has been at the forefront of the sector in Canada.
“By giving Canadians a lower interest rate than [what] they pay on their existing debt, whether a balance on a credit card or something else, Borrowell helps more of the monthly payment go toward paying off their debt instead of just the interest,” explains Eva Wong, the company’s cofounder and COO. “Our loans are for a set amount that get paid down every month. It’s more like a mortgage where the balance goes down every month and not a line of credit where borrowers can get themselves back into debt.”
Borrowell offers loans for either three- or five-year terms, in amounts ranging from $1,000 to $35,000, with interest rates as low as 5.6%. That’s a whopping reduction from typical credit-card rates of 19% or higher, or payday loan interest that can reach a staggering 300%. But there’s a catch: you need a credit score above 660 to qualify. Since Borrowell partnered last summer with consumer credit reporting agency Equifax, you can find out your score quickly, easily and for free right on Borrowell’s website. That all-important three-digit number is essentially your financial reputation.
In fact, with a good credit score, you can get a loan approval in minutes through the company’s automated online process. “After you complete a quick 60-second form, we process it instantly,” says Wong, “and you’ll know upfront whether you’re approved, for how much and at what rate.” CIBC was so impressed with the service that they partnered with Borrowell to power their own automated lending platform, which marks Canada’s first bank-FinTech affiliation for personal lending.
The company also impressed some high-profile investors, including a dragon. David Chilton – author of The Wealthy Barber and a former judge on CBC’s Dragon’s Den – was so fired up about Borrowell that he backed the company, as did Roger Martin, former dean of the Rotman School of Management, along with John Bitove of Sirius XM Canada and Sharon Ranson of The Ranson Group.
Wong says investors were intrigued by “an opportunity to disrupt the status quo.” So, apparently, were the typical Borrowell customers, who are well-educated thirtysomethings comfortable using technology in virtually every aspect of their lives but might have trouble finding a lending market to serve their financial needs. To its credit, Borrowell has become their agent of change.
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