HSBC U.S. Partners With Web-Based Avant to Offer Personal Loans

(Bloomberg) -- The personal lending boom continues: HSBC Holdings Plc is teaming up with Avant Inc., a closely held online lender, to offer unsecured loans to new and existing customers.

Beginning in the first half of next year, London-based HSBC’s U.S. arm will employ Avant’s Amount platform to offer loans of as much as $30,000 with terms up to five years, according to a press release. Consumers will be able to apply in minutes and have the money in their account within a day. Rates will go from 5.99 percent to the low-20 percent range.

“Every year millions of consumers take out a loan to pay for unexpected expenses, consolidate debt or for needed home improvements, among other things,” Pablo Sanchez, HSBC’s head of retail banking and wealth management in the U.S. and Canada, said in the statement. “By adding personal loans to our expanding product suite, we’re meeting the needs of today’s consumers who want a safe, fast and easy way to borrow money online.”

Personal loans have climbed to a record this year and are the fastest-growing U.S. consumer-lending category, according to data from credit bureau TransUnion. Outstanding balances rose to $125 billion in the second quarter, up 18 percent from a year earlier. Fintech companies like Avant, LendingClub Corp. and Social Finance Inc. have driven the gains.

The partnership, two years in the making, is the latest in HSBC’s efforts to build a digital bank in the U.S. following the unveiling of a robo-advisor partnership with Marstone Inc. earlier this month.

“Personal loans are an area of opportunity,” Jeremy Balkin, head of innovation for HSBC U.S.’s retail-banking and wealth-management business, said in an interview. “This is an open-market platform so we can grow our business outside of our footprint.”

©2018 Bloomberg L.P.