1 Near-Term Trend I'm Watching at OppFi
I'm still excited about the long-term prospects of the online lender OppFi (NYSE: OPFI), which is looking to significantly transform the subprime lending space. I particularly like the company's vision and some of the unique products they are rolling out. But I'd be lying if I said I wasn't a little disappointed with the company's Q3 earnings report, which seemed to suggest less loan demand than anticipated despite the fact that consumer balance sheets were thought to have been returning to normal. With that said, here is one trend I'll be watching closely over the next quarter or two.
OppFi wants to innovate in the subprime lending space, which is lending to borrowers with a Fair Isaac Cooperation score of less than 600, meaning these borrowers are much riskier and more likely to default on loans. OppFi's goal is not only to provide lending to these customers in times of need -- most of whom are not being properly served by traditional banks -- but also to help them improve their credit.
OppFi uses artificial intelligence to allow borrowers to apply for a loan within five minutes, providing a quick decision and interest rates that are lower than many competitors in the space. The company's main product right now, the OppLoan, is a personal loan typically around $1,500 that is paid back over an 11-month period. Borrowers are using these loans to deal with immediate financing needs such as car trouble, housing, medical bills, family, and education.
Source Fool.com
