Guaranteed Rate diversifies with personal loan product

Guaranteed Rate is diversifying its offerings amid a tougher mortgage market, by introducing personal loans.

Customers can apply for the loans in 10 minutes and receive funds between $4K to $50K within hours, the Chicago-based lender announced this week. The transactions won’t include origination, non-sufficient funds nor late fees and are available in 10 states. Borrowers can repay the loans in one-to-five year periods and can secure an APR of 5.74% as of Tuesday’s announcement. 

“Guaranteed Rate’s awesome fintech platform is designed to provide our customers with fast and frictionless financial products,” said CEO Victor Ciardelli in a press release. “And our new end-to-end digital Personal Loans are a fantastic example.”

The company introduces the product at a difficult time for the industry beset by rising interest rates and a housing market slowdown. Guaranteed Rate has already reacted to the market’s decline, shedding its entire Stearns Lending wholesale channel in March. The lender’s direct-to-consumer brand Owning Corp. also cut 189 positions this past spring.

The firm last month named three new digital leaders to grow its non-mortgage offerings including Anand Cavale, executive vice president and head of unsecured lending products who previously led consumer lending efforts at Citi and SoFi Technologies.

“We know that customers need and want their money fast and they want the process to be hassle-free and super-simple,” Cavale said in a press release. “Our new Personal Loans product over-delivers on those needs.” 

The company is the second-largest non-bank lender by 2021 volume to offer personal loans, after Rocket Cos. which also offers the product. Financial services providers are shifting focus away from mortgage lending to personal loans and fintechs are increasingly dabbling in both areas. 

San Francisco-based fintech SoFi, which offers home, student and personal loans, described the diverging revenue streams in its first quarter earnings, in which it recorded more than $2 billion in personal loan volume against $312.4 million in home loan originations.