Online lender SoFi plans to offer its customers the ability to refinance auto loans through a partnership with MotoRefi, according to Bloomberg.
SoFi Executive Vice President Jennifer Nuckles said the company is responding to frequent requests from customers to offer auto loans. “We also looked at our internal data and found that a large portion of our members carry large auto loan balances, and ... could benefit from refinancing,” she told the wire service Monday.
Through an application programming interface (API), SoFi customers can connect to MotoRefi’s auto refinancing technology. As part of the partnership, MotoRefi will pay SoFi a referral fee, according to Forbes.
"I think of the potential billions of dollars in auto loans. That's a lot of auto loans that really should be refinanced," MotoRefi CEO Kevin Bennett, told Forbes. "We want to make auto refinance as common as mortgage refi."
Bennett told Bloomberg he hopes SoFi’s scale and nearly 2 million customers will drive awareness and expand the auto refinancing market.
Only about $50 billion in U.S. auto debt is reworked in a given year, Bloomberg reported.
"It’s not a moment consumers think about, and we’re changing that," Bennett said. "We think it’s absolutely reasonable to think that everyone who refinances their homes will refinance their car."
MotoRefi also announced it has entered into similar partnerships with Even Financial and Savvy, according to Forbes.
For SoFi, the partnership with the Arlington, Virginia-based startup represents the latest product expansion by the company as it continues its push to become more than a student loan fintech.
The company announced last month that it was pursuing a quicker route to a bank charter when it revealed plans to buy Golden Pacific Bancorp — a Sacramento, California-based $150 million-asset, three-branch community bank — for $22.3 million.
SoFi’s switch to a change-in-bank-control application, generally, has a quicker turnaround than the de novo route, a process that took Varo Bank three years.
SoFi said it plans to put $750 million toward SoFi Bank’s nationwide digital banking strategy if regulators give their approval. Golden Pacific and its branches would operate as a community banking division.
The planned acquisition comes as SoFi aims to go public through a merger with a blank-check company backed by venture capital investor Chamath Palihapitiya. The $8.65 billion deal, set to close in the coming weeks, will provide the online lender with up to $2.4 billion in cash.
SoFi also expects to boost its customer base to 3 million this year, from the 1.7 million it reported in December, according to The Wall Street Journal. The company expects its adjusted net revenue from lending to increase 38% this year and projects its consumer-banking arm’s adjusted net revenue will quadruple.