SAN FRANCISCO, April 14, 2015 /PRNewswire/ -- Ascend Consumer Finance today announced that the company raised $1.5M in funding. The round was led by Mucker Capital, with participation from OCA Ventures, Birchmere Advisors and the venture arm of Securian Financial Group. Led by a team of experienced finance and technology executives, Ascend will use the funding to roll out its proprietary Adaptive Risk Pricing technology that empowers consumers to prove their real-time creditworthiness by making sound financial choices. The company's first product, RateRewards, officially launched today and will allow borrowers to reduce their monthly interest expense by up to 50 percent.
"A large segment of the US's 110M non-prime borrowers will move up into a 'prime' score range within any twelve-month period. Though considered difficult to underwrite, these borrowers are actually a lower risk than their credit scores indicate," said Steve Carlson, CEO of Ascend. "However, industry-standard predictive models, and newer alternative data approaches, focus only on a borrower's credit risk at time of application, not how it will evolve throughout the life of the loan. As a result, these better borrowers are either stuck in a loan with an outsized interest rate, or choose not to take on credit at the rates presented to them."
To solve this dilemma, Ascend has developed technology that automatically adjusts a loan as a borrower's risk profile changes. Called Adaptive Risk Pricing, this proprietary approach represents the next generation of underwriting in consumer finance.
Adaptive Risk Pricing pushes beyond purely predictive models to incorporate dynamic pricing into consumer loans. The technique recognizes the fact that certain behaviors – reducing debt, using debit instead of credit cards, building up an emergency savings cushion and making on-time payments for all outstanding debt – are associated with lower credit risk. Ascend receives real-time feedback on these variables and combines them with data from other sources. By running advanced analytics, Ascend can continually recalibrate assessments of credit risk much faster than traditional methods would allow. The result is a closer alignment between risk and pricing.
RateRewards, the first product to utilize Adaptive Risk Pricing, is designed for the millions of Americans with less than perfect credit scores. Often, their scores reflect economic conditions and circumstances that were beyond their control. Consequently, these borrowers feel trapped between banks that won't extend them a loan and the high rates associated with non-prime lenders. With RateRewards, they agree to let Ascend monitor their fiscal behaviors and, in return, they earn the opportunity to lower their interest expense. RateRewards continually reassesses borrower risk and automatically discounts monthly interest expense by up to 50 percent.
"By redefining the borrower-lender compact, borrowers share the upfront pricing risk in return for a chance to significantly lower interest costs. It's very compelling for borrowers who feel their credit is on the rise. Our data show that these 'better risk' borrowers are over 40 percent more likely to choose RateRewards versus a standard personal loan," said Scott Crawford, Ascend VP of Product and Marketing.
To learn more about Ascend Consumer Finance, and the pioneering RateRewards product, visit www.ascendloan.com.
About Ascend Consumer Finance
Ascend believes that a less than perfect credit score shouldn't lock you into a high interest rate. The company's pioneering product, RateRewards, enables borrowers to earn up to 50% off their interest expense by making responsible financial choices throughout the life of their loan. Through proprietary technology called Adaptive Risk Pricing, Ascend is able to offer loans at rates that reflect real-time performance instead of past behavior. Based in San Francisco, the Ascend team has significant experience in consumer lending, data analytics, and consumer technology. The company is funded by Mucker Capital, OCA Ventures and the venture arm of Securian Financial Group. Learn more at www.ascendloan.com.
SOURCE Ascend Consumer Finance