“Experts are surprised to see millions of Americans taking on so much personal loan debt at a time when the economy looks healthy and paychecks are growing for many workers, raising questions about why so many people are seeking an extra infusion of cash.  “Definitely yellow flares should be starting to go off,” said Mark Zandi, chief economist at Moody’s Analytics, which monitors consumer credit. “There’s an old adage in banking: If it’s growing like a weed, it probably is a weed.””

“Toast has launched Toast Capital so its customers can secure loans, with restaurant-specific quirks in mind, like “seasonality and restaurant profit margins,” according to Tim Barash , chief financial officer at Toast. Toast will offer loans between $5,000 to $250,000 to restaurants that already work within the Toast network.”

“Some 33% of people who traded in cars to buy new ones in the first nine months of 2019 had negative equity, compared with 28% five years ago and 19% a decade ago, according to car-shopping site Edmunds. Those borrowers owed about $5,000 on average after they traded in their cars, before taking on new loans. Five years ago the average was about $4,000. Rising car prices have exacerbated an affordability gap that is increasingly getting filled with auto debt. Easy lending standards are perpetuating the cycle, with lenders routinely making car loans with low or no down payments that can last seven years or longer.”

“Through Affirm’s consumer-friendly alternative to traditional credit cards, Verishop customers now have a simple, no-interest payment option1 allowing them to spread out the cost of a purchase over three easy, monthly payments. Whether a customer is redecorating their home, finding that perfect outfit or maintaining their beauty routine, the partnership with Affirm can help Verishop customers shop for all their lifestyle needs with confidence.”

“Algorithms tend to have a better record. Online financial technology companies discriminate, too, but 40% less than loan officers who make decisions face-to-face, the NBER researchers found. They also found no discrimination from the robots when it comes to loan approvals.”

“The proposed card will be available to customers who might otherwise not have good enough credit to obtain a credit card. It carries a 28 percent interest rate. In May, Sanders and Ocasio-Cortez introduced legislation that would cap interest rates on consumer loans at 15 percent.”

“Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money. “I started using Earnin when I was a minimum wage intern so I could pay for [things like] the bus to work and food,” Haq said. Now that she’s no longer an intern making minimum wage — she currently works as a nanny, handles a children’s clothing company’s social media accounts, and sells clothing online — she still occasionally finds herself needing extra cash for doctor appointments or other unplanned expenses, and that’s where Earnin comes in.”

“U.S. online lenders such as LendingClub Corp, Kabbage Inc and Avant LLC are scrutinizing loan quality, securing long-term financing and cutting costs, as executives prepare for what they fear could be the sector’s first economic downturn.”

“Valued at more than $1.2 billion after raising a big round from SoftBank in 2017 , the company has been picking up momentum in recent years, through its own direct-to-business proposition as well as through white-label services and partnerships such as the recent deal it struck with Alibaba to offer loans to merchants buying on its platform. Kabbage says it has now loaned more than $6.5 billion to over 170,000 small businesses on its platform since it was founded in 2009. The pace is accelerating for Kabbage: it loaned out $2 billion in 2018 and has already loaned out $600 million so far this year.”

“The lending market has seen a significant shift from traditional financial institutions to fintech companies providing alternative business lending. Fintech companies are changing the brick-and-mortar landscape of lending by utilizing data and technology. Here are four ways fintech has changed the lending process and how traditional financial institutions and lenders can keep up:”

“Fintechs that let workers draw money from their paycheck before payday through an app are having a moment. Such apps, including Even.com, PayActiv, EarnIn, DailyPay and FlexWage, are designed for consumers who live paycheck to paycheck — roughly 78% of the U.S. workforce according to one study.”

“The cloud-based Credit as a Service solution for mid-market businesses can issue credit lines in less than a minute, automate the customer onboarding process and apply unique B2B customer invoicing, accounts payable and payment term requirements – providing customers flexibility and an enhanced experience.”

“Capital One Financial Corp. COF +2.63% and Discover Financial Services DFS +1.78% said last week they have become more cautious in how they’re handling credit limits. The two lenders said they don’t currently see signs of deterioration in consumers’ ability to pay their debts but do question how much longer the economic recovery will last.”

“Kabbage, Inc., a global financial services, technology and data platform serving small businesses, is now extending access to more than $10 million per day to small businesses via its automated lending platform. The milestone is underscored by the addition of nearly 30,000 new customers in 2018, fueling the company’s first $500 million quarter of funding activity in Q3 2018.”